UPDATE 1-Peltz cuts Legg Mason stake 12 pct, reiterates support
* Spokesman for activist Peltz says cut only reflects investor action
* Peltz's intentions key to Legg Mason future amid CEO search
By Ross Kerber
Sept 28 (Reuters) - Legg Mason Inc board member Nelson Peltz reduced his stake in the Baltimore fund company by 12 percent, securities filings showed late on Friday, but his firm said the change did not mean less support for Legg Mason during a leadership transition.
The intentions of activist shareholder Peltz and his Trian Fund Management company are key to the future of Legg Mason, which has begun a search for a new chief executive amid questions about its strategic direction as customers continue to withdraw cash.
Peltz is known for breaking up other companies but has not said whether he plans to buy or sell shares in Legg Mason after limits on his ownership expire on November 30.
In securities filings late on Friday, Legg Mason disclosed that Peltz and Trian had disposed of 1.8 million shares of Legg Mason, 12 percent of its previous stake, at a price of $24.84 a share.
Peltz retains 12,884,337 shares in Legg Mason, or 9.54 percent, according to the filings. As of June Peltz and Trian held 10.5 percent of Legg Mason, just behind the largest shareholder, rival Baltimore fund firm T Rowe Price Group . It had 10.9 percent at the time.
In a statement sent by a Trian spokesman, the firm said the transaction did not indicate a lack of support for Legg Mason but rather "relates to a transfer of Legg Mason shares by Trian to one of its investors following the expiration of its lock-up period."
The statement said that "Nelson Peltz is an engaged board member at Legg Mason and Trian continues to be supportive of Legg Mason's plans to enhance shareholder value. ... Trian has not sold any Legg Mason shares and has no current intention to sell shares."
In a separate statement sent by Legg Mason spokeswoman Mary Athridge, the company said that "Trian has indicated to Legg Mason that it remains highly committed to its Legg Mason investment." It went on to say that "Nelson Peltz will continue to serve on the Legg Mason Board, and we look forward to continuing to work with him to drive shareholder value."
Legg Mason said on September 11 that its current CEO and chairman, Mark Fetting, will step down as of Oct. 1. It has hired the recruiting firm Korn/Ferry International to find a new leader.
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