Franklin Resources, Inc. (“Franklin Templeton”) (NYSE: BEN) and
Legg Mason, Inc. (“Legg Mason”) (NYSE: LM) announced today that all
conditions to the closing of their previously announced merger
transaction have been satisfied and the transaction is expected to
close on July 31, 2020.
Pursuant to the merger, which was announced on February 18,
2020, Franklin Templeton will acquire Legg Mason for $50.00 per
share of common stock in an all-cash transaction. Franklin
Templeton will also assume approximately $2 billion of Legg Mason’s
outstanding debt.
Today, Franklin Templeton is depositing the merger consideration
in a third-party escrow account. The merger closing will occur and
the funds will be released to the paying agent at the closing,
subject to Legg Mason’s continued compliance in all material
respects with its covenants under the merger agreement.
Trading in shares of Legg Mason’s common stock is expected to be
suspended on the New York Stock Exchange (“NYSE”) as of close of
business on July 31, 2020, and Legg Mason’s common stock is
expected to be delisted from the NYSE.
Following the closing, combined, consolidated financial results
will first be reported for the quarter ended September 30, 2020,
with Franklin Templeton’s pro forma historical financials expected
to be available by mid-October. Each firm reported June 30, 2020
assets under management on July 13, 2020, and the pro forma assets
under management by asset class at June 30, 2020 are provided
below.
By Asset Class:
(in billions)
Pro Forma Combined
Franklin Templeton Stand-Alone
30-Jun-20
Preliminary
30-Jun-20
Preliminary
31-May-20
31-Mar-20
31-Dec-19
30-Jun-19
Equity
412.0
235.8
230.0
200.9
273.2
276.6
Fixed Income
646.1
211.4
212.3
214.9
243.0
260.2
Multi-Asset/ Balanced
131.3
118.5
118.6
107.4
125.6
125.0
Alternative
123.4
46.8
46.5
46.4
46.1
44.2
Long Term Assets
1,312.8
612.4
607.4
569.6
687.9
706.0
Cash Management
80.7
10.4
10.2
10.7
10.4
9.2
Total
1,393.5
622.8
617.6
580.3
698.3
715.2
About Franklin Templeton
Franklin Resources, Inc. [NYSE: BEN] is a global investment
management organization operating, together with its subsidiaries,
as Franklin Templeton. Franklin Templeton’s goal is to deliver
better outcomes by providing global and domestic investment
management to retail, institutional and sovereign wealth clients in
over 170 countries. Through specialized teams, the Company has
expertise across all asset classes, including equity, fixed income,
alternatives and custom multi-asset solutions. The Company’s more
than 600 investment professionals are supported by its integrated,
worldwide team of risk management professionals and global trading
desk network. With employees in over 30 countries, the
California-based company has more than 70 years of investment
experience and more than $622 billion in assets under management as
of June 30, 2020. For more information, please visit
investors.franklinresources.com.
About Legg Mason
Guided by a mission of Investing to Improve Lives™, Legg Mason
helps investors globally achieve better financial outcomes by
expanding choice across investment strategies, vehicles and
investor access through independent investment managers with
diverse expertise in equity, fixed income, alternative and
liquidity investments. Legg Mason’s assets under management are
$783 billion as of June 30, 2020.
Forward-Looking Statements
Statements in this press release that are not historical facts
are “forward-looking statements” within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. When used in this
press release, words or phrases generally written in the future
tense and/or preceded by words such as “will,” “may,” “could,”
“expect,” “believe,” “anticipate,” “intend,” “plan,” “seek,”
“estimate,” “preliminary” or other similar words are
forward-looking statements.
Various forward-looking statements in this press release relate
to the acquisition by Franklin Templeton of Legg Mason, including
regarding expected scale opportunities, operating efficiencies and
results, growth, client and stockholder benefits, key assumptions,
timing of closing of the transaction, revenue realization, cost and
expense synergies, financial benefits or returns, accretion and
integration costs.
Forward-looking statements involve a number of known and unknown
risks, uncertainties and other important factors, some of which are
listed below, that could cause actual results and outcomes to
differ materially from any future results or outcomes expressed or
implied by such forward-looking statements. Important
transaction-related and other risk factors that may cause such
differences include: (i) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement; (ii) anticipated benefits of the transaction,
including the realization of revenue, accretion, financial benefits
or returns and expense and other synergies, may not be fully
realized or may take longer to realize than expected; and (iii)
Franklin Templeton may be unable to successfully integrate Legg
Mason’s businesses with those of Franklin Templeton or to integrate
the businesses within the anticipated timeframe.
Other important factors that may affect our business or the
combined business’ future operating results, include, but are not
limited to: (i) our business operations are subject to adverse
effects from the outbreak and spread of contagious diseases such as
COVID-19, and we expect such adverse effects to continue, (ii)
volatility and disruption of the capital and credit markets, and
adverse changes in the global economy, may significantly affect our
results of operations and may put pressure on our financial
results; (iii) the amount and mix of assets under management
(“AUM”) are subject to significant fluctuations; (iv) the
significant risk of asset volatility from changes in the global
financial, equity, debt and commodity markets; (v) our funds are
subject to liquidity risks or an unanticipated large number of
redemptions; (vi) harm to Franklin Templeton’s or Legg Mason’s,
reputation may negatively impact revenues and income; (vii)
Franklin Templeton may review and pursue other strategic
transactions that could pose risks to our business operations;
(viii) strong competition from numerous and sometimes larger
companies with competing offerings and products could limit or
reduce sales of our products, potentially resulting in a decline in
their market share, revenues and income; (ix) the ability to manage
and grow our business and the combined business successfully can be
impeded by systems and other technological limitations; (x) poor
investment performance of our products could reduce the level of
our AUM or affect our sales, and negatively impact our revenues and
income, (xi) our business operations are complex and a failure to
perform operational tasks properly or the misrepresentation of our
services and products resulting, without limitation, in the
termination of investment management agreements representing a
significant portion of our AUM, could have an adverse effect on our
revenue and income, (xii) dependence on key personnel could
negatively affect financial performance; (xiii) the businesses are
subject to extensive, complex, and frequently changing rules,
regulations, policies, and legal interpretations; (xiv) our
contractual obligations may subject us to indemnification costs and
liability to third parties; (xv) any significant limitation,
failure or security breach of information and cyber security
infrastructure, software applications, technology or other systems
that are critical to operations could disrupt the businesses and
harm operations and reputation; and (xvi) regulatory and
governmental examinations and/or investigations, litigation and the
legal risks associated with the businesses, could adversely impact
AUM, increase costs and negatively impact profitability and/or our
future financial results.
Any forward-looking statement made in this press release speaks
only as of the date on which it is made. Factors or events that
could cause actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. Neither
Franklin Templeton nor Legg Mason undertakes any obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by law.
This release contains forward-looking statements subject to
risks, uncertainties and other factors that may cause actual
results to differ materially. For a detailed discussion of other
risk factors, please refer to the risks, uncertainties and factors
described in Franklin Templeton’s and Legg Mason’s recent filings
with the U.S. Securities and Exchange Commission, including,
without limitation, each company’s most recent Annual Report on
Form 10-K and subsequent periodic and current reports.
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version on businesswire.com: https://www.businesswire.com/news/home/20200717005268/en/
Franklin Resources, Inc. Investor Relations: Brian Sevilla,
(650) 312-4091, brian.sevilla@franklintempleton.com Corporate
Communications: Matt Walsh, (650) 312-2245,
matthew.walsh@franklintempleton.com franklinresources.com
Legg Mason, Inc. Investor Relations: Alan Magleby, (410)
454-5246, afmagleby@leggmason.com Corporate Communications: Mary
Athridge, (212) 805-6035, mkathridge@leggmason.com
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