(Bloomberg) -- Franklin Resources Inc. is nearing an all-cash offer for asset manager Legg Mason Inc., a deal that would create an investing giant with more than $1 trillion in assets under management, according to people familiar with the matter.
The owner of investment manager Franklin Templeton could announce a deal as soon as Tuesday for Legg Mason, said the people, who asked to not be identified because the matter isn’t public.
They are discussing a transaction that would value Legg Mason at $50 per share, or a 23% premium to the Baltimore-based company’s share price Friday, the people said. San Mateo, California-based Franklin Resources is expected to have $1.5 trillion in assets under management after the deal closes, the people added.
Legg Mason closed down less than 1% to $40.72 on Friday, giving the company a market value of about $3.5 billion.
Representatives for Franklin Resources and Legg Mason declined to comment.
The talks come as active asset managers face unprecedented pressures on fees and have been trimming staff to control costs. That’s put pressure on the industry to consolidate. Jupiter Fund Management Plc agreed to acquire rival U.K. asset manager Merian Global Investors on Monday.
This potential deal is complementary because Legg Mason primarily focuses on retail investors, while Franklin Resources caters to institutional investors.
To contact the reporter on this story: Ed Hammond in New York at ehammond12@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Liana Baker, Matthew Monks
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