Comerica Received a Deal Offer Before Fifth Third
A recent filing on Wednesday revealed a relatively swift negotiation and some short-term benefits for Comerica CEO Curt Farmer.
Sometimes, when banks share the history behind acquisition agreements, it includes captivating drama. For instance, Capital One’s March 2024 disclosure described a six-month effort to acquire Discover, involving three declined offers and a seven-week pause in talks.
However, Fifth Third’s description of its proposed merger with Comerica, released Wednesday, was less dramatic. The Cincinnati-based bank was not Comerica’s first potential partner, according to the filing.
Earlier Offer from Another Institution
The CEO of an unidentified company, referred to as Financial Institution A, made a verbal proposal in September for an all-stock deal with Comerica. The board decided the terms “were not likely to be more attractive than the consideration that could be offered by another counterparty.”
Furthermore, the board “determined that Fifth Third would be the optimal merger counterparty to a business combination transaction if Fifth Third were to make a proposal which appropriately valued Comerica,” the filing stated.
Ongoing Discussions Between CEOs
Fifth Third had not yet made an official offer. Still, Comerica CEO Curt Farmer and Fifth Third CEO Tim Spence “had periodically discussed” finance trends for years, the document noted.
The board “determined that Fifth Third would be the optimal merger counterparty to a business combination transaction if Fifth Third were to make a proposal which appropriately valued Comerica.”
Author’s summary: Comerica’s board favored Fifth Third as the best merger partner after an initial offer from another institution was declined, with ongoing discussions between CEOs preceding any official proposal.