Activist Investor Pushing to Sell Comerica, Will Seek Board Seats
Investors are growing impatient waiting for a wave of regional-bank mergers
- HoldCo Asset Management is planning a board fight at Comerica, pushing the regional bank to consider a sale due to underperformance.
- Comerica faces pressure to sell amid investor impatience for consolidation among regional lenders to compete with larger banks.
- Wells Fargo analyst Mike Mayo estimates a takeover price of $90 a share, renewing his decade-old pressure on Comerica to sell.
An activist investor plans to launch a board fight at Comerica CMA -0.38%decrease; red down pointing triangle, intensifying pressure on the Texas-based regional bank to sell itself.
The campaign signals the growing impatience among investors for a long-awaited wave of consolidation among regional lenders, which are under pressure to merge in order to better compete with behemoths like JPMorgan Chase and Bank of America.
The details
Hedge fund HoldCo Asset Management has argued that Comerica should explore a sale after years of underperformance.
If Comerica doesn’t pursue a sale, HoldCo expects to nominate around five directors to the company’s 11-person board when the window opens, likely in December, according to people familiar with the matter. The investor’s plans are fluid and could change.
HoldCo, which invests in banks, in July revealed a 1.8% stake in Comerica now worth roughly $160 million.
Comerica has more than 350 branches throughout Texas, California, Michigan, Arizona and Florida and its market value is around $9 billion.
A spokesperson for Comerica said the company welcomes feedback from shareholders and is continually looking at opportunities to create value.
HoldCo said Comerica has mismanaged its interest rate exposure and cost structure and would be better off as part of a bigger bank. It is approaching a key regulatory threshold of $100 billion in assets, which comes with steep compliance costs.
Other top Comerica shareholders including Citadel and North Reef Capital Management have signaled similar concerns, people familiar with the matter said.
Separately, the bank has continued to struggle to deal with a botched technology upgrade in recent years, according to a person familiar with the matter.
Comerica shares have underperformed a broader index of bank peers in recent years, falling by nearly 30% over the last seven years when the broader index is up. Chief Executive Curtis Farmer took over in April 2019.
The context
Outspoken Wells Fargo analyst Mike Mayo has also publicly renewed his own pressure on Comerica. Around a decade ago, he led a push for Comerica to explore a sale. His team at Wells Fargo last week estimated a takeover price of $90 a share, a 25% to 30% premium.
“If you asked me a decade ago whether we’d be in the same situation, then I’d probably throw my hands up and say that’s crazy,” Mayo said. “It’s unbelievable.”
Shareholder activists typically shy away from highly regulated industries like banks, but the push by HoldCo could pave the way for more campaigns at lenders.
A flurry of regulatory changes under the Trump administration has many dealmakers and bank executives optimistic that mergers might finally pick up. So far, activity has been somewhat muted, partially due to turbulent markets and uncertainty from Trump’s tariff policies.
But some midsize banks have started to make moves. Pinnacle Financial Partners and Synovus Financial in July announced an all-stock merger valued at $8.6 billion. The two companies and Comerica all rank within the 50 largest U.S. banks.