Comerica Received a Deal Offer Before Fifth Third
A recent filing revealed a relatively swift negotiation process, including several short-term benefits for Comerica CEO Curt Farmer.
When banks reveal the background of acquisition talks, it sometimes brings a sense of drama. For example, Capital One's March 2024 disclosure showed a six-month effort to acquire Discover, involving three declined offers and a seven-week pause in talks.
Fifth Third's Approach Was Less Dramatic
Fifth Third’s recent explanation of its proposal to merge with Comerica featured far less drama. According to the filing, Fifth Third was not the first to show interest in Comerica.
Earlier Offer from Another Institution
The CEO of a company referred to only as Financial Institution A made a verbal offer for an all-stock deal with Comerica in September. However, Comerica’s board concluded that the terms “were not likely to be more attractive than the consideration that could be offered by another counterparty.”
The board also said, “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.”
Ongoing Discussions Between CEOs
While Fifth Third had not yet made an offer, Comerica CEO Curt Farmer and Fifth Third CEO Tim Spence had “periodically discussed” financial industry trends over several years.
“Periodically discussed with each other certain trends in finance for years,” the filing noted.
Summary
The negotiations leading to Fifth Third's proposal were less contentious than some previous bank deals, with Comerica already considering other suitors and a history of cordial discussions between CEOs.
Author's summary: Comerica’s merger talks with Fifth Third followed earlier interest from another firm, reflecting a thoughtful process rather than intense competition or drama.