LSE Said to Hire Recruiting Company to Find Successor for CEO

By Nandini Sukumar

Oct. 26 (Bloomberg) -- London Stock Exchange Group Plc, which operates Europe's oldest independent bourse, has hired a recruiting firm to find a successor to Chief Executive Officer Clara Furse, according to a person familiar with the matter.

Furse, 51, will likely remain the company's CEO until the end of 2009 to oversee the exchange's purchase of Borsa Italiana SpA, said the person, who declined to be identified. LSE Group, whose shares have slumped 76 percent this year, hired a London- based headhunter to seek a new CEO from candidates both within and outside the company, the person said. Furse has discussed succession plans with LSE Chairman Chris Gibson-Smith, although no list of candidates exists, said the person.

Canadian-born of Dutch parents, Furse was previously chief executive of Credit Lyonnais Rouse Ltd., the derivatives unit of Credit Lyonnais SA, before joining the LSE in 2001. The exchange, which started in 1698 when a group of brokers met in Jonathan's Coffee House to trade stocks and commodities, is facing competition from as many as seven new rivals. In September, the LSE's trading system broke down on the day European equities posted their biggest gain in five months, hurting clients who trade an average $17.5 billion a day.

`Fully Committed'

``Clara has been with the exchange for eight years and it's natural that the board is thinking about succession planning,'' London-based LSE spokesman Patrick Humphris said in an e-mail. ``Clara remains fully committed to the exchange's continued success and, in particular, to the completion of its integration with Borsa Italiana.''

The Sunday Telegraph reported earlier today that the LSE hired a search company to look for a successor to Furse.

As the first woman to serve as CEO of the LSE, Furse rebuffed five takeover offers in two years and bought the operator of the Milan stock exchange in 2007.

Furse was brought in after shareholders forced Gavin Casey to resign following a failed attempt to merge the exchange with Frankfurt-based Deutsche Boerse AG. LSE has spurned takeover approaches since December 2004 from Euronext NV, Deutsche Boerse and twice from New York-based Nasdaq Stock Market Inc.

The LSE's shares fell as low as 437.5 pence on Oct. 24, dropping below their Dec. 10, 2004, level for the first time. That was the last trading day before Deutsche Boerse made a takeover offer for the LSE. The stock closed last week at 477.5 pence, bringing its year-to-date decline to 76 percent, the fifth-largest in the FTSE 100 Index.

To contact the reporter on this story: Nandini Sukumar in London at nsukumar@bloomberg.net.