Legg Mason has agreed to repurchase the nearly 5.6 million shares of its common stock beneficially owned by Shanda Asset Management Investment, the asset management arm of Singapore-based global private investment firm Shanda Group, for $40.50 per share in a private transaction, confirmed Legg Mason spokeswoman Mary Athridge.
Shanda Group originally acquired a 10% stake in Legg Mason in April 2016, making it Legg Mason's largest shareholder.
Last December, Shanda Group announced plans to increase its stake in the money manager to 15% from 10%. However, the firm decided in the fall to pursue other investments and never ended up increasing their ownership stake, said Ms. Athridge.
As a result, Tianqiao Chen, chairman and CEO of Shanda Group, and Robert Chiu, president of Shanda Group, left Legg Mason's board of directors in the fall, and the Baltimore-based money manager agreed to repurchase all the shares that Shanda owns.
This $225.5 million purchase is an acceleration of its authorized repurchase program for the next three quarters. As a result, Legg Mason will not repurchase shares in the market prior to the quarter ending December 31, 2018.
Legg Mason will pay down amounts that were drawn under its revolving credit line relating to the repurchase of shares from Shanda until October 2018.
Legg Mason had $763 billion in assets under management as of Nov. 30.
