Deutsche Börse Chief Steps Down

Heads rolled at German stock market operator Deutsche Börse on Monday. Chief Executive Werner Seifert and Rolf Breuer, head of the supervisory board, agreed to step down after a long and bitter battle with major shareholders, which began when Deutsche Börse announced plans to take over the London Stock Exchange.

Following an extraordinary meeting of the group's supervisory board, Deutsche Börse announced that Seifert "will be leaving the company with immediate effect."

And "by the end of this year, Rolf Breuer will resign from the supervisory board and hand over his responsibilities to a successor."

Long-running fued

The resignations, largely expected, were the culmination of a long and bitter battle between Deutsche Börse's management and its major shareholders, particularly the Anglo-Saxon private equity firms TCI and Atticus Capital, which together hold around 15 percent of the operator's share capital.

The long-running feud originally broke out late last year, when Seifert (photo), with Breuer's backing, announced plans for Deutsche Börse to take over the LSE.

The idea immediately ran into fierce resistance from Deutsche Börse's shareholders and TCI (The Children's Investment Fund) spearheaded a campaign to have the plans aborted.

Faulty acquisition plan

The rebel shareholders, arguing that the acquisition price was too high and the money would be better used by paying out in the form of a higher dividend and a share buyback, eventually won the battle and forced Deutsche Börse to bury its ambitions.

But TCI went even further, launching a campaign to have Seifert and Breuer kicked out of office.

In an attempt to defuse the incendiary atmosphere, Deutsche Börse has repeatedly sought to placate the rebel shareholders in recent weeks, offering to transfer to shareholders "a significant proportion" of the cash reserves it had set aside to finance the takeover. It also actively sought to give the shareholders greater say in the running of the company.

But TCI refused to be appeased and continued to call for the heads of both Breuer and Seifert.

In its statement Monday, Deutsche Börse said Breuer had been mandated "to change the composition of the supervisory and executive boards in order to reflect the new ownership structure of the company."

As part of those changes, three supervisory board members would resign and Breuer would try to find replacements "in a timely fashion," the company said.

Replacements sought

Already last month, Peter Levene, the head of the world's leading insurance market Lloyd's, announced his resignation from the supervisory board.

When seeking new board members, "Breuer will consult closely with Deutsche Boerse shareholders," the company said.

Breuer had also been asked to find a successor for Seifert. The new chairman "shall be recruited from outside the company," the statement said.