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Quick Hits: Legg Mason Goes Private?


Brief scrutiny of today's headlines.


Asset manager Legg Mason (LM) is reviewing ways to go private, the New York Post reports.

Citing "people familiar with the situation," the newspaper says Legg Mason has been reviewing a move that could involve one or more private equity investors, including Kohlberg Kravis Roberts & Company. The private equity firm would buy Legg Mason and spin off most of its funds.

A spokesman for Legg Mason denied the report, saying it was "categorically untrue." KKR declined to comment.

The Post says obstacles may emerge to block the deal -- at least for now -- or Legg Mason could wait for the market turmoil to subside before making a decision.

Legg Mason has about $1 trillion in assets under management in a range of mutual and hedge funds. It's been hit hard by the souring of mortgage securities and wavering investor confidence.

Last week, Legg Mason said it would inject $630 million to help support one of its money-market mutual funds to protect against losses on asset-backed commercial paper. This boosted the company's shares, but the stock is still down about 50% for the year.

In the last 6 months, Legg Mason has raised about $2.4 billion to shore up its balance sheet. That includes $1.25 billion from a KKR affiliate, which granted the firm convertible shares in Legg Mason. KKR's investment allowed it to put KKR member Scott Nuttall on Legg Mason's board.

Legg Mason, based in Baltimore, was founded in 1899.

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