The chairman of the London Stock Exchange, Donald Brydon, is expected to survive an audacious attempt by an activist investor to bring about an abrupt end to his two and a half years at the helm of the group.
Brydon faces a vote this week on his future after a row with the Children’s Investment Fund (TCI), which owns 5% of the exchange, over boardroom changes.
It comes as the annual number of flotations on the LSE is expected to top 100 for the first time since 2014, in a sign that the UK is still attractive to firms despite the Brexit vote. This year’s figure compares with 65 initial public offerings in 2016, and is higher than anywhere else in Europe.
“Despite the challenges Brexit presents, London’s highly global, deep and liquid capital markets continue to be the ideal partner for funding the world’s growth,” said Nikhil Rathi, a senior executive at LSE.
“It is particularly significant that the number of international listings in London is up, with North American listings up nearly sevenfold on last year.”
LSE will be keen to draw a line under its row with TCI, which has forced a shareholder meeting to be called after the exchange announced in October that its group chief executive, Xavier Rolet, 58, would leave next year. TCI, run by Sir Christopher Hohn, had wanted Rolet to stay and Brydon, 72, to go.
An intervention by the Bank of England governor, Mark Carney, led to an accelerated departure date for Rolet and a pledge from Brydon to leave at the annual general meeting in 2019. But TCI has pressed ahead with its demand that Brydon leave sooner.
Hohn, who is known for his activist stance, looks likely to lose his battle to oust Brydon. Two influential shareholder advisory bodies, ISS and Glass Lewis, have advised their clients to vote against TCI’s resolution, the only item on the agenda at Tuesday’s specially convened meeting.
ISS said TCI had not proved its case that removing Brydon would be beneficial for the company, and looking for a chief executive and a chairman at the same time would not be ideal.
Glass Lewis is not convinced either. It said it had found little evidence to support the claims that shareholders had lost faith in Brydon as chairman or that the company might face difficulty attracting quality chief executive candidates to serve under him.
Other investors have come out against TCI, including Blackrock and Qatar Investment fund.