Elliott Criticizes Citigroup and The Salomon Brothers Fund for Calling Stockholder Campaign a 'Side Show,' Calls on SBF Director

NEW YORK, Oct. 11  /PRNewswire/ -- Elliott Associates, L.P. and Elliott International, L.P. (collectively "Elliott"), who together are reportedly the largest stockholder of The Salomon Brothers Fund Inc. (NYSE:SBF), today sent an open letter to the SBF Board of Directors criticizing Citigroup (NYSE:C) and SBF for calling the growing opposition to the proposed new management agreement a "side show," and calling on SBF directors to eliminate the discount to net asset value.

Elliott is campaigning AGAINST the new management agreement that is scheduled for a vote at a Special Stockholders' Meeting at 4:00 p.m. on October 21, 2005, at the American Conference Centers, 780 Third Avenue, in New York.  The requested vote is necessary as part of the pending transaction between Citigroup Inc. and Legg Mason, Inc. (NYSE:LM).

In an open letter to SBF directors, Elliott, a long-term investor and the beneficial owner of 5.88 million shares, or approximately 6%, of SBF, said:

   * Stockholder value is not a "side show" - it should be the main event

   * Our fund's persistent discount to net asset value must be eliminated or
     nearly eliminated to create stockholder value, even if it reduces the
     amount of management fees paid to Citigroup or any successor

   * Until you address and solve the discount problem we will continue to
     urge SBF stockholders to vote against the new management agreement

   October 11, 2005

   Mr. Andrew L. Breech
   Ms. Carol L. Colman
   Mr. William R. Dill
   Mr. R. Jay Gerken, Chairman
   Mr. William R. Hutchinson
   Mr. Thomas F. Schlafly

  Dear Directors of The Salomon Brothers Fund Inc.:



You have recommended that stockholders voting at the October 21, 2005 Special Meeting approve a new management agreement as part of Citigroup's $3.7 billion sale of its asset management business to Legg Mason.  As you are aware, we are urging stockholders to vote the BLUE proxy card against adoption of the new management agreement unless and until you take action to eliminate or nearly eliminate SBF's significant discount to net asset value.

On September 27, 2005, additional proxy solicitation materials were filed with the SEC on behalf of SBF and other funds advised by Citigroup Asset Management.  In those materials we were shocked to see the following statement describing Elliott's campaign to see the SBF Board take concrete steps to eliminate or nearly eliminate the discount to net asset value:

"Side show issue - Dissidents are focusing on issue that lacks relevance to

the purpose of the Special Meeting."

Is it really your view that creating value by eliminating or nearly eliminating the discount to net asset value "lacks relevance"?  What then is the main event -- Citigroup's $3.7 billion?

In our view, creating stockholder value should always be the main event for Directors.  We suspect our fellow stockholders agree.  Taking effective steps to eliminate or nearly eliminate the discount to net asset value, in turn, should be a critical focus in the Board's ongoing commitment to stockholders.

As we fully explained in our proxy materials, we believe SBF's stockholders have suffered from approximately $200 million in aggregate value trapped by the Fund's discount to net asset value, and SBF's efforts to address this problem through limited stock buybacks have been wholly ineffective in our opinion.  As you know, there are several ways to remedy this problem for the benefit of all stockholders, and we have discussed the various options available to SBF in detail with your Chairman.  Some of the strategies could involve shrinking the assets under management upon which Citigroup's management fees are based, but that must not stand in the way of the Board's acting in the interest of stockholders.

Based on disclosure in SBF's recent public filings, it appears that the five directors labeled as "independent" by SBF collectively maintain approximately 90 paid directorships on the Boards of funds managed by Citigroup affiliates, seemingly resulting in aggregate compensation amounting to hundreds of thousands of dollars in calendar year 2004.

SBF's stockholders -- the people who have placed their trust and money in your care -- continue to suffer because of the discount to net asset value. Yet the elimination of that discount seems to be something you cannot bring yourselves to discuss in your correspondence with stockholders.  We believe you should formulate and disclose to all stockholders your specific plans to eliminate or nearly eliminate that discount before you try to sell them on a new management agreement that facilitates a transaction benefiting Citigroup and its stockholders to the tune of $3.7 billion.  Please take care of SBF's stockholders first.  After you have done that, you may find a more receptive audience for your Citigroup-Legg Mason recommendation.

We trust that you agree that as Directors, you owe a fiduciary duty to the stockholders of SBF and no one else. We hope that you also agree as Directors that creating value for stockholders should always be the "main event." Accordingly, we call upon you to publicly repudiate SBF's "side show" characterization.

The discount to net asset value can and should be eliminated or nearly eliminated.  Until you address and solve that problem we will continue to urge SBF stockholders to vote against the new management agreement.

   Sincerely yours,

   Mark Levine
   Portfolio Manager

  About Elliott Associates, L.P.


Elliott Associates, L.P. and its sister fund, Elliott International, L.P., have more than $5.4 billion of capital under management.  Founded in 1977, Elliott Associates is one of the oldest funds of its kind under continuous management. 

DATASOURCE: Elliott Associates, L.P.



CONTACT:  Scott Tagliarino, [phone], or [phone] (cell) 

Copyright