Franklin Resources, Inc. (NYSE:BEN) entered into a definitive agreement to acquire Legg Mason, Inc. (NYSE:LM) from funds managed by Trian Fund Management, L.P. and others for $4.6 billion on February 17, 2020. Under the terms of the transaction, Franklin Resources, Inc. will pay $50 per share to acquire the common stock of Legg Mason, Inc. in an all-cash transaction. Franklin Resources, Inc. will also assume approximately $2 billion of Legg Mason's outstanding debt. At the effective time, with respect to each outstanding option to purchase shares, if the exercise price of such Legg Mason option is equal to or greater than the consideration, such Legg Mason option will terminate and be cancelled as of immediately prior to the effective time, without any consideration being payable in respect thereof, and have no further force or effect and if the exercise price of such Legg Mason option is less than the merger consideration, such Legg Mason option will terminate and be cancelled as of immediately prior to the effective time in exchange for the right to receive a lump sum cash payment in the amount equal to the number of shares underlying the Legg Mason option immediately prior to the effective time, multiplied by the merger consideration minus the applicable aggregate exercise price. Each outstanding restricted stock unit and performance restricted stock unit will terminate and be cancelled as of immediately prior to the effective time in exchange for the right to receive a lump sum cash payment equal to the merger consideration, multiplied by the number of shares subject to such Legg Mason restricted stock unit or performance restricted stock award.

EnTrust Global, a Legg Mason, Inc. affiliate that provides alternative investment solutions, and Franklin Templeton, jointly agreed that it was in their best interest that EnTrust Global repurchase its business, which will be acquired by its management at closing. The transaction will be funded from Franklin Resources, Inc.'s existing balance sheet cash. Upon completion of the transaction, Legg Mason, Inc. will become a wholly owned subsidiary of Franklin Resources, Inc. Also, the investment managers and the sub advisers of the funds of Legg Mason will become subsidiaries of Franklin Templeton. Legg Mason would have the right to terminate the merger agreement, to enter into an alternative transaction, provided that upon such termination, Legg Mason would be required to pay Franklin Resources a termination fee equal to $115 million. If Franklin Resources terminates the agreement, then Franklin Resources will pay Legg Mason a fee of $115 million. In addition to the foregoing termination rights, and subject to certain limitations, either party may terminate the agreement if the merger is not consummated by February 17, 2021.

Following the closing of the transaction, Jenny Johnson will continue to serve as President and Chief Executive Officer, and Greg Johnson will continue to serve as Executive Chairman of the Board of Franklin Resources, Inc. There will be no changes to the senior management teams of Legg Mason's investment affiliates. Global headquarters will remain in San Mateo, California and the combined firm will operate as Franklin Templeton. The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals, approval by Legg Mason's shareholders and the expiration of the waiting period applicable to the merger under the Hart-Scott-Rodino Antitrust Improvements Act, along with the advisory clients of Legg Mason, investment affiliates representing a specified percentage of Legg Mason revenue consenting to the continuation of their advisory relationships at close. The Transaction will not be completed unless certain conditions are met. This includes Legg Mason Funds whose shareholders have approved new management agreements. The transaction has been unanimously approved by the Boards of Franklin Resources, Inc. and Legg Mason, Inc. Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 4 million shares outstanding stock of Legg Mason, Inc., have entered into a voting agreement in support of the transaction. As of April 2, 2020, Federal Trade Commission granted early termination notice. As of April 9, 2020, the special meeting of Legg Mason shareholders will be held on June 5, 2020. As of June 8, 2020, the meeting been adjourned to July 6, 2020. As of April 30, 2020, the European Commission has unconditionally approved the transaction. As of May 15, 2020, Legg Mason's shareholders approved the transaction. As of May 26, 2020, the Board of each fund of Legg Mason recommended that shareholders vote for each proposal applicable to their fund. As on July 17, 2020, all the conditions relating to the transaction have been fulfilled and Franklin Resources deposited the merger consideration in a third-party escrow account on July 17, 2020, with the funds to be released upon closing of the merger. The transaction is expected to close no later than the third calendar quarter of 2020. As of February 19, 2020, the transaction is expected to close by the end of the third calendar quarter of 2020. As of April 15, 2020, the transaction is expected to be consummated in the latter part of 2020. As of April 20, 2020, the transaction is expected to close in the third quarter of 2020. As of May 18, 2020, the transaction is expected to close by August 1, 2020. As of May 27, 2020, the transaction is expected to close in the third quarter of 2020. As July 17, 2020, the transaction is expected to close on July 31, 2020. The transaction is expected to generate mid-teens GAAP EPS accretion excluding one-time integration charges and upper twenties percentage GAAP EPS accretion in fiscal 2021.

Chris Spofford, Todd Owens and Kyle Murray of Broadhaven Capital Partners, LLC, David Heaton, Brad Whitman and Jyri Wilska of Morgan Stanley & Co LLC and Ardea Partners LP acted as financial advisors while David K. Boston, Laura H. Acker, Jordan Messinger, Christopher Peters and Justin Browder of Willkie Farr & Gallagher LLP acted as legal advisors to Franklin Resources, Inc. Paul Taubman, Michael Freudenstein and Scott Matlock of PJT Partners and Anu Aiyengar, Nina Naydenova and Matt Harlow of J.P. Morgan Securities LLC acted as financial advisors and fairness opinion providers to Board of Directors and special committee of Legg Mason. Frederick Green, Sachin Kohli, Christina De Vuono, Paul Wessel, David Wohl, Faiza Rahman, Joe Pari, Jeffrey Osterman, Steven Newborn, Steven Bernstein, Jeff White, Steven Margolis, Vadim Brusser of Weil, Gotshal & Manges LLP and Robert Saunders, James Carroll, Ronald Brown and Graham Robinson of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Legg Mason, Inc. Thomas Merchant acted as general counsel of Legg Mason. Robert Katz and Mark Gerstein of Latham & Watkins LLP acted as legal advisors to PJT Partners and JP Morgan Securities LLC. Prema Thiele of Borden Ladner Gervais LLP acted as legal advisor to Franklin Resources, Inc. in this transaction. Innisfree M&A Inc. acted as information agent to Legg Mason. Dechert LLP served as legal counsel to EnTrust Global. PJT Partners Inc. will get $36 million as fee for its financial services and $5 million for fairness opinion fee which became payable when the opinion was rendered and is creditable against a transaction fee that is payable contingent upon the consummation of the merger, which is approximately $41 million. Legg Mason will pay J.P. Morgan a fee of up to $7 million, $2 million of which became payable upon delivery by J.P. Morgan of its opinion and up to $5 million of which is payable upon the consummation of the merger. Computershare Investor Services LLC acted as information agent to Legg Mason. The fees to be paid to the Computershare for these solicitation services are estimated to range from approximately $0.74 million to $1 million.

Franklin Resources, Inc. (NYSE:BEN) completed the acquisition of Legg Mason, Inc. (NYSE:LM) from funds managed by Trian Fund Management, L.P. and others on July 31, 2020. The shares of Legg Mason, Inc. ceased trading on the New York Stock Exchange as of the close of trading on July 31, 2020, and are being delisted from NYSE. Matthew Nicholls, Gwen L. Shaneyfelt, and Craig S. Tyle, became the Directors of Legg Mason, Inc. All of the previous directors of Legg Mason, Inc. ceased to serve as its Directors. Matthew Nicholls was appointed as President and Chief Executive Officer of Legg Mason, Inc. and Gwen L. Shaneyfelt was appointed as Vice President and Chief Financial Officer of Legg Mason, Inc. No changes planned to investment strategies or portfolio management personnel within Legg Mason's specialist investment managers. David Blass, Ryan Brizek, Debbie Sutter, Patrick Ryan, Arman Naraghi-Pour and Essete Workneh of Simpson Thacher & Bartlett LLP acted as legal advisor for Legg Mason.