CEO Xavier Rolet quits as London Stock Exchange tries to draw line under management row
The London Stock Exchange says its CEO is stepping down with immediate effect after eight and a half years at the helm, and will not seek re-election, as the exchange tries to draw a line under a row with a top shareholder over management succession.
Xavier Rolet had been due to leave at the end of 2018, but the company said in a statement Wednesday that he is stepping down immediately instead. He will be replaced on an interim basis by the chief financial officer, David Warren until a successor is found.
Chairman Donald Brydon, meanwhile, will not stand for re-election at the shareholders’ meeting in 2019, as the company seeks to renew its leadership after a difficult year in which a planned merger with Germany’s Deutsche Boerse failed. The deal was blocked in March by European Union regulators on the grounds that it would create a monopoly in some markets.
Rolet had previously said he would leave at the end of 2018, but activist hedge fund TCI accused Chairman Donald Brydon of pushing him out and called a shareholder meeting to try to reverse the decision and oust Brydon.
The row – coming at a tricky time for the LSE as it risks losing a chunk of its derivatives clearing business to erstwhile merger partner Deutsche Boerse (DB1Gn.DE) due to Brexit – had dragged in the Bank of England.
Rolet’s departure after 8-1/2 years in charge could trigger fresh speculation that a rival exchange such as ICE (ICE.N) could bid for the LSE, though analysts say any mega-bourse deal would face intense scrutiny by competition authorities.
In a statement issued by the LSE on Wednesday, Rolet said there had been a “great deal of unwelcome publicity” surrounding his departure “which has not been helpful to the company.”
“At the request of the board, I have agreed to step down as CEO with immediate effect. I will not be returning to the office of CEO or director under any circumstances,” he added.
The LSE said Brydon and the board believed that in 2019, under a new chairman, “it would be in shareholders’ interests to have a new team at the helm to steer the future progress of the company.”
However, UBS analyst Michael Werner, according to Reuters, said Rolet’s immediate departure created significant uncertainty over future strategy.
“With concerns increasing about the ability of (LSE unit) LCH to maintain the share of the over-the-counter clearing business in a Brexit scenario, the timing of Rolet’s departure could pose a challenge for the firm defending its market share from Deutsche Boerse,” Werner said in a note to clients.
UBS has a “neutral” rating on LSE shares.
At 0945 GMT, the stock was down 2.2 percent at 3,716 pence, in a UK blue-chip index .FTSE 0.5 percent lower. LSE shares have risen around five-fold under Rolet’s tenure.