LONDON (Reuters) - The London Stock Exchange (LSE.L) said on Thursday that its shareholders would meet on December 19 to decide if its chairman Donald Brydon should be removed, as demanded by activist hedge fund TCI.
The move is the latest in a public tussle between the LSE and TCI over the company’s handling of plans for Chief Executive Xavier Rolet to step down by the end of 2018. TCI, which has a 5 percent stake in the LSE, had accused the board of forcing Rolet out and instead demanded a meeting to remove Brydon.
On Wednesday, the LSE announced Rolet was to step down immediately and asked TCI to drop its call for a meeting to vote on Brydon’s future.
But TCI, founded by Christopher Hohn, said earlier on Thursday it was sticking with its demand to oust Brydon, leaving the LSE with no choice but to call a meeting.
The LSE said its board unanimously recommended that shareholders reject the resolution, saying ditching Brydon risked significantly damaging the company.
A second resolution from TCI for Rolet to remain in place was withdrawn by the hedge fund on Thursday.
The general meeting will be held at 1200 GMT on December 19 A majority of votes cast at the meeting would be needed for the resolution to pass.
“The board strongly believes that it is in the best interests of the company, its shareholders and other stakeholders for Donald Brydon to remain as chairman of the company until he steps down in 2019,” the LSE said in its notice for the meeting.
TCI had no immediate comment.
People close to TCI said the hedge fund was continuing with its request for a shareholder meeting because it did not want Brydon to be in charge of overseeing the selection of Rolet’s successor.
The hedge fund will help the LSE to find Rolet’s replacement if the exchange needs its assistance, and will have “a very strong opinion” on the candidates the board identifies, one of the people said.
The LSE notice said: “Aspects of Xavier Rolet’s operating style were also important factors taken into account by the board when assessing the right time to put in place a succession plan.”
It would, however, be detrimental to the LSE and its stakeholders to provide further detail on these aspects, the notice added.
Rolet chalked up “very considerable achievements” but “no CEO is irreplaceable”, and the existing management team has a deep knowledge of LSE business, the exchange said.
People who have worked for Rolet say relations between the Frenchman and Brydon had become strained, with the CEO sidelining senior management at times.
One of the sources close to TCI said the dispute with the LSE board had “definitely” left the exchange open to an opportunistic takeover approach from a rival.
“We believe there is the room for consolidation in the global exchanges industry,” the source said.
Rolet led an attempt by the LSE to merge with Deutsche Boerse (DB1Gn.DE), which competition regulators blocked. A tie up with another big exchange would face similar scrutiny.
Additional reporting by Noor Zainab Hussain in Bengaluru; editing by Jane Merriman