Furse May Leave LSE Post as CEO Search Targets Rolet

By Nandini Sukumar

Feb. 6 (Bloomberg) -- Clara Furse’s eight-year reign at London Stock Exchange Group Plc may end this month.

Xavier Rolet, who ran Lehman Brothers Holdings Inc. in France, emerged yesterday as the leading candidate to replace her, according to two people familiar with the situation.

The announcement of a new CEO may come as early as February, the people said. Rolet, 49, who left Lehman after Nomura Holdings Inc. acquired its European investment bank, will likely be presented to the board by the LSE’s nomination committee, said the people, who declined to be identified before a formal decision. The Financial Services Authority, which regulates U.K. markets, must approve the appointment.

Rolet, a former equity trading executive at Goldman Sachs Group Inc., oversaw customer management in Lehman’s London office before moving to Paris to oversee the French business. He helped run European equity trading at Goldman Sachs, Credit Suisse First Boston and Dresdner Kleinwort Benson before joining Lehman Brothers in 2000.

The LSE, Europe’s oldest independent exchange, hired a recruiting firm last year to find a successor to Furse, according to a person familiar with the matter. Shares of the exchange lost 74 percent last year on concern falling stock prices and competition from electronic exchanges would erode profit.

New trading platforms such as Turquoise, Chi-X Europe Ltd. and the European units of Bats Exchange and Nasdaq OMX Group Inc. wrested away about 25 percent of trading in FTSE 100 stocks from the exchange, forcing it to cut fees.

2009 Share Slump

LSE shares added 1.5 percent to 449.5 pence at 8:48 a.m. in London, trimming their 2009 decline to 12 percent.

There’s an “unpalatable cocktail facing LSE,” said Bruce Hamilton, an analyst at Morgan Stanley, in a Jan. 27 note in which he cut the exchange to “underweight” from “equal- weight.” The “risks of a sustained downturn in volumes, a la Japan in the 1990s, and the difficulty of earnings recovery given structural pressures on pricing and market share make us cautious.”

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 each session.

The exchange, which started in 1698 when a group of brokers met in Jonathan’s Coffee House to trade stocks and commodities, hired Furse, 51, in 2001 after shareholders forced Gavin Casey to resign following a failed attempt to merge with Frankfurt- based Deutsche Boerse AG.

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. LSE has spurned takeover approaches since December 2004 from Euronext NV, Deutsche Boerse and twice from New York-based Nasdaq Stock Market Inc.

Rolet was educated at the Ecole Superieure de Commerce in France and has a masters in business administration from Columbia University.

LSE spokesman Patrick Humphris declined to comment.

-- With reporting by Jacqueline Simmons in Paris. Editors: Chris Nagi, Eric Martin

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