July 29 (Reuters) - Dye & Durham ( DYNDF ) will review

strategic alternatives to stabilize its finances and may even

consider selling itself, it said on Tuesday, reaching a

settlement that avoids a proxy fight with its second-largest

investor, Plantro.

The agreement comes less than a month after Plantro, which

owns 11% of the Toronto-based Canadian legal software maker,

said it was nominating three directors to the board who would

push for a sale of the company, and calling for a special

shareholders' meeting to vote on the nominees.

Plantro had argued a sale was the only way to realize a

control premium for shareholders and restore stability in the

business.

Dye & Durham ( DYNDF ) has now agreed to add Plantro-nominee David

Danziger to its board of directors. Danziger, who has expertise

in audits, accounting, M&A and management consulting, will also

chair a newly formed special committee to lead the review.

In return, Plantro has withdrawn its special meeting

request.

Dye & Durham ( DYNDF ) said it will not make any further public

comments about the review, which could also include potential

mergers, recapitalizations and asset sales, until the process

has been completed.

In May, Plantro, a company controlled by former Dye & Durham

CEO Matthew Proud, asked Dye & Durham ( DYNDF ) to stabilize its executive

team, divest its financial services division, and later this

year pursue the sale of its remaining core business.