* Peltz's Trian holds 4.3 pct stake in Legg Mason
* Trian won't accumulate more than 9.9 pct for two years
* Shares up 3.1 pct
(Recasts, adds share price rise, details of deal)
By Ajay Kamalakaran
BANGALORE, Oct 26 Billionaire activist investor
Nelson Peltz has secured a seat on the Legg Mason Inc (LM.N)
board after accumulating a stake of 4.3 percent in the asset
Peltz's appointment avoids a possible proxy fight. Legg
Mason said on Monday the appointment refects an agreement with
Peltz's Trian Fund Management.
A Legg Mason spokeswoman, Mary Athridge, said Trian agreed
not to accumulate more than 9.9 percent of Legg Mason's stock
over the next two years.
Trian also agreed to vote in favor of Legg Mason's board
nominees over the next two years and agreed to refrain from
"things that could initiate a proxy fight," she said.
"We welcome Nelson, whose firm is a significant investor in
Legg Mason," Legg Mason Chief Executive Mark Fetting said in
Trian holds about 6.94 million Legg Mason shares, or 4.3
percent, Legg Mason said in a statement.
The shares were up 3.1 percent to $32.90 in morning trading
on the New York Stock Exchange.
A British newspaper reported in June that Baltimore-based
Legg Mason, home of famed fund manager Bill Miller, could face
a shareholder challenge from Peltz. [ID:nN24222737]
Peltz is known for his bruising battles with corporate
management, including his 2007 fight with Cadbury Schweppes
that resulted in it spinning off a beverage division.
Legg Mason's 13-member board agreed to elect Peltz to the
board on Tuesday, expanding the board to 14 seats.
(Reporting by Ajay Kamalakaran; Additional reporting by Ross
Kerber in Boston; Editing by Muralikumar Anantharaman and John