Magazine article American Banker

Comerica Settles Brokerage's Suit over Withdrawal of Takeover Bid

Magazine article American Banker

Comerica Settles Brokerage's Suit over Withdrawal of Takeover Bid

Article excerpt

Detroit-based Comerica Inc. said Wednesday it had settled a lawsuit brought by First of Michigan after the banking company backed out of an agreement to buy the brokerage.

Both sides refused to say if the settlement included a financial payout. The agreement comes four months after First of Michigan shareholders filed a $16 million class action charging that Comerica had breached an agreement to go forward with a $45 million stock-swap acquisition announced in March 1993.

While the settlement ends a messy chapter in Comerica's acquisition efforts, it does not mean that the bank has soured on the idea of buying a full-service brokerage.

"We'll continue to aggressively pursue our strategy of expanding our capabilities in the securities and investment businesses," said Wayne Mielke, a spokesman for the bank, which has its own securities subsidiary.

Indeed, analysts say executives recently affirmed their view that such a business could be a strategic fit for Comerica.

"They still have an interest in it," said Fred Cummings, senior banking analyst at McDonald & Co. in Cleveland. He speculates that the bank could seek a similarly sized brokerage in Detroit or Chicago.

For its part, First of Michigan said it was no longer interested in being acquired. "We are determined to grow our business," said president and chief executive Steve Gasper.

Bank acquisitions of whole brokerages are rare, especially on the scale that Comerica proposed in 1993. …

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