Background
On October 6, 2025, Fifth Third Bancorp announced that it had agreed to acquire Comerica Incorporated in a $10.9 billion stock-for-stock transaction (the “Merger”). S&C represented Fifth Third in the Merger transaction and in the subsequent litigation in the Delaware Court of Chancery.
After publicly advocating for a sale of Comerica prior to the Merger announcement and then endorsing the proposed Merger when announced (even taking credit for it), a Comerica stockholder—activist hedge fund HoldCo Opportunities Fund V, L.P.—filed suit in the Delaware Court of Chancery seeking to enjoin the closing of the Merger, naming Comerica, Comerica’s board, and Fifth Third as defendants. HoldCo alleged that Comerica’s board approved the transaction not to maximize shareholder value, but to shield the Company’s directors and CEO from a threatened proxy contest and to secure the CEO’s continued employment. HoldCo further claimed that the Merger Agreement contained deal-protection provisions that impermissibly restricted Comerica’s board, even though those provisions were reciprocal and, as HoldCo’s own internal analysis acknowledged, consistent with market practice in recent stock-for-stock bank mergers.
HoldCo separately sought to enjoin Comerica’s stockholder vote to approve the Merger, asserting that Comerica’s proxy disclosures were materially deficient. The Court bifurcated the two issues, and the parties engaged in targeted expedited discovery on HoldCo’s disclosure claims in December 2025. After HoldCo filed its opening brief, Comerica issued supplemental disclosures, and HoldCo conceded that its disclosure claims were moot. The parties proceeded to litigate HoldCo’s remaining claims challenging the Merger Agreement’s reciprocal deal protection provisions.
Summary
After receiving the last required U.S. regulatory approval on January 13, 2026, Fifth Third notified the Court that Fifth Third and Comerica intended to close the transaction on February 1. HoldCo responded on January 14 by filing an emergency motion for a temporary restraining order (“TRO”) seeking to restrain Comerica from closing the transaction pending further proceedings in support of its preliminary injunction motion. After Fifth Third and Comerica filed their joint opposition to HoldCo’s motion on January 16, Vice Chancellor Zurn issued a minute order on January 23 denying HoldCo’s request for a TRO.
On January 26, Vice Chancellor Zurn filed a letter opinion explaining her reasoning for denying HoldCo’s TRO motion. HoldCo Opportunities Fund V, L.P. v. Angulo, No. 2025-1360-MTZ, 2026 WL 194419 (Del. Ch. Jan. 26, 2026). Even applying the plaintiff-friendly colorable claim standard, the Court held in a well-reasoned opinion that HoldCo had “failed to raise a colorable claim warranting injunctive relief,” expressing “doubt” that the Merger was defensive and finding that the deal-protection provisions were not “colorably illegal or inequitable.” Vice Chancellor Zurn rejected HoldCo’s claims that the deal-protection provisions, which included a force-the-vote provision, a provision requiring good faith renegotiation if the stockholders voted down the deal, a no-shop provision with a fiduciary-out, a 12-month outside date with limited termination rights, and a termination fee of $500 million representing approximately 4.7% of the implied deal value, were “illegal” under 8 Del. C. § 141(a) and Delaware precedent. Those provisions left Comerica’s board sufficient room “to discharge their managerial authority in fidelity to stockholders,” and Delaware courts have “decline[d] to craft a per se rule ‘that the contract is invalid simply because it delimited the range of discretion the directors otherwise had under the law to act.’” The Court also found that “HoldCo cannot show the deal protections were preclusive or coercive” because “Comerica stockholders had a meaningful ability to vote down the Merger” and maintain the status quo.
Vice Chancellor Zurn next found that HoldCo had not shown irreparable harm. HoldCo’s assertion regarding the potential emergence of topping bidders rested on “speculation,” which “cannot supply a cognizable harm warranting a TRO.” Finally, while considering the balance of the equities, Vice Chancellor Zurn acknowledged that “[e]njoining a premium merger on the eve of closing will introduce substantial delay and uncertainty,” and “may very well deprive [Comerica’s] stockholders of Fifth Third’s certain premium that they chose to accept.” Quoting from Defendants’ joint opposition brief, Vice Chancellor Zurn observed that “‘the real risk of irreparable harm is not from the consummation of the merger—it is from this motion itself.’”
Implications
This opinion reinforces the Court of Chancery’s long-held view that, except in truly extraordinary circumstances or an uninformed stockholder vote, a merger transaction should not be enjoined absent a competing, superior proposal. The Court also expressed skepticism toward the shifting factual positions taken by the activist stockholder plaintiff, who may “have taken excessive liberties with the facts.” The opinion also underscores that speculative assertions, without evidence of concrete harm much less a competing bid, do not justify enjoining or delaying a stockholder-approved merger in the Court of Chancery.