Citigroup is having trouble convincing mutual fund shareholders to approve its swap with Legg Mason Inc., The Baltimore Sun reports. The $3.7 million deal will remake Legg Mason into the fifth-largest money manager worldwide, while Citigroup, which is transferring $437 billion worth of assets to Legg Mason, will get its brokerage business.

Although Citigroup spokeswoman Mary Athrige said the company is "pleased with the acceptance the transaction is receiving," it failed to reach a quorum of 50% of shares in each fund to approve the exchange. Thus, Citigroup is planning on continuing to mail additional proxy information to shareholders in the coming weeks and hold another shareholder meeting in November.

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