Comerica, the business bank facing investor pressure to sell, ruled out formally putting itself on the block after discussing its strategic options in March with financial advisers, according to people familiar with the matter.
The Dallas-based lender determined it's a bad time to actively pursue a sale, said the people, who asked not to be identified because the information is private. Comerica made the decision after meeting with Sandler O'Neill & Partners and other advisers to discuss the feasibility of finding a buyer in the current market, the people said. Sandler O'Neill, a longtime adviser to Comerica, has no mandate to handle a sale, they said.
"The Comerica board is committed to maximizing shareholder value and is taking aggressive steps to deliver on its promise," Wayne Mielke, a spokesman at the $69 billion-asset Comerica, said in an e-mailed statement.
A representative for Sandler O'Neill declined to comment.
Comerica Chief Executive Officer Ralph Babb has decided against reaching out to potential suitors, while remaining open to approaches, the people said. Some of the concerns about selling the bank would be finding buyers for a bank of this size, Wall Street's negative reaction to recent bank deals and government aversion to big bank mergers.
During the $69 billion-asset lender's annual meeting Tuesday, Babb acknowledged that he's "looking at all alternatives," while noting the challenges he'd face in pursuing an outright sale. While entertaining offers is "one of the elements that's on the table," low interest rates and energy prices would affect the bank's value.
"You have to look at what's going on in the industry," he said.
A chief hurdle to selling is a scarcity of capable buyers, based on logical suitors analysts have suggested.
Mitsubishi UFJ Financial Group Inc., the Japanese owner of California's Union Bank, which had $116 billion in assets as of March 31, has been vocal about its ambitions to make a sizable stateside acquisition. But its ability to pursue a deal in the near-term is hindered until it completes setting up a new U.S. holding company to comply with 2014 Federal Reserve rules for foreign-owned banks with at least $50 billion in assets. That process should finish this summer.
Another logical suitor for the company -- Minneapolis-based U.S. Bancorp -- is restricted from pursuing any bank takeovers after entering a consent order last year with the Comptroller of the Currency over alleged anti-money laundering deficiencies.
Executives with BB&T Corp., another sizable regional bank based in Winston-Salem, N.C., which has the wherewithal to buy Comerica, has told investors that it plans to refrain from making acquisitions after it closed its purchase of Pennsylvania bank National Penn Bancshares Inc. this month.
Representatives for Union Bank, U.S. Bancorp and BB&T declined to comment.
Comerica, with 476 branches in California, Florida, Michigan and elsewhere, has a market value of nearly $8 billion.
It was among the 25 largest U.S. financial holding companies in the U.S. at the end of 2015, according to the bank's website.
Its profitability has fallen as it sets aside money to cover troubled energy loans, which accounted for more than 6% of its total loans at March 31, according to a company investor presentation.
The bank is focusing on boosting profits by cutting costs, retaining Boston Consulting Group Inc. to assist in that endeavor.
