Friday, May 18, 2012

Legg Mason Pops 8% On Convert Repurchase From KKR

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Shares of Legg Mason jumped after the money manager said it will repurchase $1.25 billion of convertible senior notes from private equity firm Kohlberg Kravis Roberts, perhaps signaling a floor in its stock price.

Shares of Legg Mason (LM) rose about 8% to $24.09 on news of itsnew capital plan, which will cut expenses by reducing debt. Shares are 30% below their 52-week high of $34.40

Legg’s board also authorized $1.0 billion in additional share repurchases.

Legg CEO Mark Fetting said reducing gross debt by $350 million in the near term means

“we will also have flexibility to return a significant portion of the cash we generate to our shareholders when it is appropriate to do so.”

Shares of Kohlberg Kravis Roberts (KKR) fell 2.5%, or 31 cents, to $12.08.

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