An activist investor campaigning for the boss of the London Stock Exchange Group (LSE) to extend his tenure is plotting an imminent move to oust the company’s chairman.
Sky News has learnt that The Children’s Investment Fund (TCI) will write to the LSE’s board as soon as Thursday afternoon to requisition an extraordinary shareholder meeting aimed at removing Donald Brydon.
Shareholders in the exchanges group said they expected fresh developments imminently in a situation which is rapidly developing into one of the City’s most spectacular bust-ups for years.
City sources said that TCI’s effort to oust Mr Brydon could, however, be delayed or abandoned altogether amid renewed deliberations in the LSE’s boardroom about how to end the bizarre stand-off between its chief executive, Xavier Rolet, and the rest of the board.
TCI, which owns 5% of the LSE, is one of the company’s most influential and long-standing shareholders, and an ardent supporter of Mr Rolet.
Last week, it wrote to Mr Brydon, alleging that he had forced Mr Rolet to announce last month that he would retire by the end of next year.
Sir Chris Hohn, who runs TCI, said he had received “no satisfactory answer” from Mr Brydon about the reasons for Mr Rolet’s removal during a meeting earlier in the week.
“We seek your resignation and ask the board to immediately begin the search for a new chairman,” his letter added.
The hedge fund boss wrote to Mr Brydon again this week, urging him to waive a confidentiality agreement relating to the circumstances of Mr Rolet’s resignation.
TCI has spent the last few days discussing the situation with other LSE shareholders, and believes it is gathering significant support for its conviction that Mr Brydon should step down.
The LSE said in response to TCI’s original letter that it had “followed a proper governance process to plan an orderly succession for the CEO”.
It added: “The FCA [Financial Conduct Authority] was kept informed throughout the process and emphasised the importance of the plan for an orderly succession.
“Xavier Rolet will be providing input into the process to identify his successor and is focussed on his role as CEO until his successor is appointed.”
The FCA is understood to have expressed concerns about the escalating situation given the LSE’s vital role in the City’s financial markets infrastructure.
The boardroom row has come as a particular shock to the City both because of the mutually respectful tone struck in a statement on October 19 about Mr Rolet’s intention to step down, and because of the stellar job he has done during his near-decade at the company.
He had planned to retire in any case if a merger between the LSE and Germany’s Deutsche Boerse – which was ultimately blocked by regulators – had been completed.
A TCI spokesman and the LSE both declined to comment.