Shareholder Revolt Erupts Over Comerica Acquisition Terms

A contentious battle is unfolding around the proposed acquisition of Comerica by Fifth Third Bancorp. Activist investor HoldCo Asset Management escalated its campaign this Monday, urging fellow shareholders to reject the all-stock deal valued at $10.9 billion. With a pivotal shareholder vote scheduled for January 6, 2026, significant questions are being raised about the negotiation process and the transaction's fairness.

In a recently published presentation, HoldCo, which holds an approximate 1.6% stake in Comerica, launched a multi-pronged critique of the agreement. The investor group labeled the deal as undervalued, arguing that the agreed-upon price sits at the low end of Fifth Third's initially communicated exchange ratio. A primary point of contention is the reported 17-day negotiation window, which HoldCo characterizes as unusually rushed.

The presentation further suggests potential conflicts of interest concerning Comerica's CEO, Curtis Farmer. HoldCo calculates that Farmer could receive compensation totaling around $140 million over the next decade if the merger proceeds—a sum purportedly exceeding what he might gain if he departed following a potential proxy contest in April 2026. The activists also revealed that another large bank, referred to as "Financial Institution A" (believed by reports to be Regions Financial), had previously expressed interest in a deal.

Management's Stance and Financial Context

Fifth Third's leadership has publicly dismissed concerns. CEO Tim Spence stated at a conference on December 10 that he was "not worried at all" about the lawsuit filed by HoldCo. He maintains that regulatory approvals from the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Texas Department of Banking are expected "around the new year," targeting a deal closure in the first quarter of 2026. Comerica is reportedly aiming for a completion date of February 2, 2026.

Should investors sell immediately? Or is it worth buying Comerica?

Financially, Comerica's stock has demonstrated strength over the past twelve months. In a separate business move, the bank recently reduced its prime rate to 6.75%, effective December 11. The shares closed yesterday's session at $87.71, down 0.52%.

The Road Ahead and Strategic Implications

The immediate focus is the January 6, 2026, shareholder meeting. HoldCo emphasizes that a vote against the deal does not automatically terminate it; instead, Fifth Third would be obligated to renegotiate and resubmit the transaction to shareholders. The activist's lawsuit and public campaign could influence both timelines and bargaining positions.

Market analysts largely reflect the prevailing uncertainty, with a majority maintaining a "Hold" rating on Comerica stock. The outcome now hinges on the shareholder vote and the progress of HoldCo's legal challenge. Depending on the result, Fifth Third and Comerica may be forced back to the negotiating table or could proceed to finalize the acquisition as currently structured.