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Legg Mason to Elect Investor Peltz to Board

Published: Monday, 26 Oct 2009 | 6:54 AM ET

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By: Reuters

Billionaire activist investor Nelson Peltz will be elected to Legg Mason's board, the U.S. asset manager said on Monday, in a move that would avoid a proxy fight for the next two years.

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Peltz's Trian Fund Management and Legg Mason [LM Loading... () ] agreed to a pact where the fund will not accumulate more than 9.9 percent of Legg stock for the next two years, Legg Mason spokeswoman Mary Athridge said by phone.

Trian holds about 6.94 million shares, or 4.3 percent, in the asset manager, Legg Mason said in a statement.

"We welcome Nelson, whose firm is a significant investor in Legg Mason," Chief Executive Mark Fetting said in the statement. "We look forward to benefiting from his insights and experience."

Legg Mason said Peltz's appointment reflects an agreement between the asset manager and Trian.

Nelson Peltz
Nelson Peltz

In June, shares of Legg Mason rose more than 10 percent on a single day after a British newspaper reported the Baltimore-based asset manager, home of famed fund manager Bill Miller, could face a shareholder challenge from Peltz.

Peltz is known for his bruising battles with corporate management, including his 2007 fight with Cadbury Schweppes that resulted in it spinning off a beverage division.

Legg spokeswoman Athrdige confirmed to Reuters a Wall Street Journal report that said Trian has also agreed to vote in favour of Legg Mason's board nominees over the next two years.

Trian agreed not to do "things that could initiate a proxy fight," Athridge said.