UK Edition
LSE shareholders: no need for board overhaul if tie-up tanks
Investors in LSE Group have called for Xavier Rolet to remain as chief executive, despite the impending collapse of its £24bn merger with Deutsche Boerse.
As the European Commission prepares this week to block the tie-up of the two exchanges, shareholders in the British bourse have backed the Frenchman, even though he was due to leave as part of the deal.
Mr Rolet had ceded the top job in the Anglo-German union in return for it being headquartered and domiciled in London. The EC is expected to block the deal as early as Wednesday, after indicating in February it was minded to reject the deal on competition concerns linked to the LSE’s Italian bond platform, MTS.
Investors speaking to The Sunday Telegraph were in agreement that there was no need to rejig the top jobs, in particular the chief executive role, once the deal falls through.
Simon Brazier, UK fund manager at Investec Asset Management, said that Mr Rolet has transformed the exchange since taking on the top job in 2009 and “is the best person I can think of to run that business” regardless of whether or not the deal falls away.
One of the exchange’s top three shareholders, who did not want to be named, said Mr Rolet “can stay but he has to deliver in the sense that if there is an interest in the LSE by other bidders he needs to engage. Second, there needs to be more focus on cost management and third, there needs to a focus on returning capital to shareholders.”
However, he was critical of the LSE chief executive’s outspoken views about Intercontinental Exchange. Mr Rolet said last year that the American suitor was a “slash and burn” organisation that would chuck parts of the exchange “in the bin”. Making those comments was an impediment to future M&A deals with US exchanges, the shareholder said.
Guy Foster, who leads Brewin Dolphin’s research team, said that “perhaps the biggest concern is that he [Rolet] might still want to leave the business.”
James Quinn comment: With Deutsche Boerse deal all but off, London Stock Exchange must now focus on finding a new leader
Focus: The Italian job: how a meeting in Rome stung a £24bn merger