Pedestrians leave and enter the London Stock Exchange in London, Britain August 15, 2017. REUTERS/Neil Hall
November 10, 2017
(Reuters) – London Stock Exchange Group <LSE.L> will fix a date within three weeks for a shareholder vote on the removal of Chairman Donald Brydon and retention of CEO Xavier Rolet at the behest of activist investor TCI Fund Management, it said on Friday.
TCI had called for a vote to remove Brydon, saying the company had not explained why Rolet was leaving and that it also wanted the company to persuade Rolet to extend his tenure until 2021.
“LSEG will meet its obligations in respect of the requisition,” the bourse operator said in a statement on Friday, indicating that it would hold the shareholder meeting “as soon as reasonably practicable”.
The company must send out notice of an extraordinary general meeting (EGM) within 21 of receiving TCI’s letter on Thursday. Once sent, it must hold the meeting within 28 days, meaning it would take place before the end of the year at the latest.
LSE said on Oct. 19 that Rolet would step down by the end of 2018, nearly a decade after he took charge. During his tenure LSE’s stock has risen from about 6 pounds to 37 pounds.
The removal of a director has to be passed by a majority of those voting at the EGM.
TCI, led by British billionaire Chris Hohn, first complained about Rolet’s planned exit in a letter to the LSE last Friday. The letter said that Brydon and the board were trying to force out the CEO, an allegation denied by LSE on Monday.
Other LSE shareholders have since said they would like Rolet to stay at the helm.
A small institutional investor told Reuters on Friday that he would be happy for Rolet to remain as chief executive to guide the business through Britain’s impending exit from the European Union, which could cause upheaval for the country’s financial services industry.
“Particularly with Brexit going on, you need someone who knows what they’re doing there (at the LSE),” the investor said.
The fund manager said he had not yet engaged with LSE or TCI but added: “I presume that he (Hohn) wouldn’t be doing this unless he had been given the nod by Xavier that he’s prepared to stay on.”
A source close to Egerton Capital, another LSE investor, has also told Reuters that the hedge fund will support a resolution to keep Rolet at the company.
(Reporting by Noor Zainab Hussain in Bengaluru and Huw Jones and Ben Martin in London; Editing by David Goodman)