Toxic takeover feud costs LSE chiefs their jobs
Mark Carney’s unprecedented intervention forces TWO of City’s biggest names to quit
THE London Stock Exchange’s chief executive and chairman have sensationally quit following a vicious public spat that erupted after a disastrous attempt to merge with a German rival.
Following one of the most toxic rows in recent City history, chief executive Xavier Rolet has stepped down with immediate effect and chairman Donald Brydon plans to go in 2019 – although last night rumours swirled he could be forced out sooner.
The pair are the latest victims of a cursed £21bn effort to sell the LSE to Frankfurt rival Deutsche Boerse, which fell apart earlier this year. Deutsche’s chief executive Carsten Kengeter has already been destroyed by the deal, quitting in disgrace after he was charged with insider trading. He denies the charges.
The debacle led to a feud with a hedge fund boss who has questioned why Rolet had decided to step down after the deal collapsed.
David Buik of stockbroker Panmure Gordon said: ‘The merger has been a complete nightmare for everyone involved. I would think it’s extremely unlikely that Brydon stays until 2019 because there will be a push to wipe the slate clean.’
The LSE last month announced 58year-old Rolet was stepping down but refused to give details. He had planned to go if the Deutsche merger was successful. However, billionaire hedge fund boss Sir Chris Hohn – who owns 5pc of LSE – was enraged by the plan and claimed Brydon had forced Rolet out.
In a series of furious letters, he accused the board of gagging the chief executive from speaking out and that they had tried to launch a ‘character assassination’ of Rolet.
Hohn used his clout as a shareholder to force an investor vote on whether Rolet – who was in the post for nine years – should be reinstated and Brydon sacked instead.
But the campaign to keep the French chief executive in his job suffered a grievous blow on Tuesday when Bank of England governor Mark Carney made an astonishing intervention and said he could not imagine how the boss would be able to stay on.
Insiders said it effectively signed Rolet’s ‘death warrant’ – and yesterday he quit.
In a statement, Rolet slammed the ‘unwelcome publicity’ around his departure and said he is going for good. He said: ‘At the request of the board, I have agreed to step down as chief executive with immediate effect.
‘I will not be returning to the office of chief executive or director under any circumstances.’ Finance boss David Warren will step up as interim chief executive until a successor is found.
Brydon, meanwhile, is staying on as chairman to lead that search but will be replaced at the board’s annual meeting in spring 2019. He said: ‘The board is confident LSE will continue to prosper with David Warren as interim chief executive and the existing strong management team.’
Hohn must now decide whether to call off the shareholder vote, because he could still ask investors to sack Brydon. If the hedge fund boss forges ahead, the LSE will today be forced to publish detailed reasons for Rolet’s departure – giving the world a behindthe-scenes insight into the row.
The board at the LSE has written to Hohn urging him to back off, and accusing him of running a ‘public, concerted and highly personalised campaign’.
It added that the move upset careful succession plans and had ‘also been more broadly damaging to the company, including negatively impacting Xavier Rolet’s relationships with the board’.