Legg Mason has agreed to buy back the remaining shares still owned by Shanda Asset Management two months after two executives of the Singapore-based company resigned from its board of directors.
Legg Mason announced Friday that it will pay $225.5 million to buy out Shanda’s roughly 6 percent stake in the Baltimore-based money management firm. Legg will pay $40.50 each for the 5,567,653 shares Shanda owns.
Legg shares were trading at $41.77 each on Friday afternoon, down 15 cents for the day.
Shanda took a nearly 10 percent stake in Legg in April 2016 when it bought out Nelson Peltz’s investment, ending the activist shareholder’s efforts to shake up the company following the financial crisis. Shanda paid Peltz’s Trian Asset Management $336.8 million for its 10.5 million shares.
Late last year, Legg announced that Shanda, the investment vehicle for a Chinese billionaire who made his fortune in internet gambling, would increase its stake to 15 percent and invest $500 million in Legg products.
Shanda’s investment was seen as offering Legg opportunities to expand in the lucrative Asian market, but for reasons unexplained Shanda sold half its Legg shares in a private sale in June. By October, its CEO and its president resigned from Legg’s board. Shanda did not reply to a request for comment at the time.
On Friday, Legg likened the Shanda buyback to an acceleration of the company’s planned share buybacks for the next three quarters. As a result, it said it would not buy other shares until at least next October. Instead it would apply that money to repaying the line of credit it tapped to repurchase the shares from Shanda.