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London stock CEO survives
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September 14, 2000: 1:11 p.m. ET
Stock exchange boss gets surprise reprieve in secret ballot of shareholders
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LONDON (CNNfn) - London Stock Exchange Chief Executive Gavin Casey clung to his job by the skin of his teeth Thursday after surprisingly surviving a secret ballot of exchange shareholders.
Casey was clearly voted out in an earlier informal vote at the LSE's annual shareholder meeting in London, triggering a formal secret ballot of attendees' votes. But when those votes were counted, he retained his position -- despite many investors blaming him for the fiasco of the exchange's botched merger with its Frankfurt counterpart.
The positions of Chairman Don Cruickshank and board member Michael Marks were also subject to voting by shareholders, but they, too, hung on to their jobs.
 The LSE's proposal to merge with Deutsche Boerse, the operator of its German counterpart, collapsed this week, following a hostile $1.2 billion offer for the LSE by Sweden's OM Gruppen.
The London-Frankfurt deal, unveiled only after two years of talks, had been beset by criticism from the start. The architects of the plan to form a pan-European bourse called iX were embarrassed last week when an independent report commission by Merrill Lynch & Co. said the combination of the two exchanges would prove "unworkable."
Merrill Lynch is a shareholder in the LSE and advised it on the merger proposal. Michael Marks, chairman of Merrill Lynch Europe, was unaware that his company's equity markets division had commissioned any such report.
OM Gruppen, the operator of the Stockholm stock exchange, pounced in August with a cash and stock offer for the LSE, seeking to exploit the dissatisfaction of the London exchange's shareholders with the iX plan.
The LSE last week was forced to cancel a planned shareholder vote on the creation of i, in order to concentrate on defending itself against the OM offer. Chairman Cruickshank previously described OM's bid as "derisory."
Since the OM offer, various reports have predicted the LSE would now face takeover bids from one or more overseas exchanges: either U.S.-based Nasdaq, which was to have been a partner with the LSE and Frankfurt under the original deal; Euronext, a grouping of continental European exchanges; or from Deutsche Boerse.
On the fringes of the LSE's shareholder meeting Thursday, Brian Winterflood, a vocal critic of the path pursued by the exchange's managers, told CNNfn.com the LSE needed a CEO who is "young, aggressive, computer-literate, intelligent and a whiz kid".
Casey "had committed hara-kiri," declared Winterflood. When shareholders at the meeting asked the CEO to clarify his position in the face of hostile questioning, Casey replied: "No, thanks," to the visible embarrassment of his chairman.
The LSE's plan to form iX -- as well as an earlier, abandoned proposal to link the trading systems of up to eight European exchanges -- had been prompted by a desire to prevent the London market falling behind as share trading becomes increasingly international.
Younger, more innovative services, including electronic trading systems such as Instinet and Tradepoint, have set out to win a slice of the trade in equities, causing the established national exchanges to seek ways to make their services cheaper and more attractive. One of the objectives of those who sought to unite the national exchanges, for example, was to allow members of one exchange to buy and sell the shares of companies listed elsewhere.
In London, such developments have put an end to the centuries-old assumption that the city's position as Europe's predominant financial center will hold indefinitely. 
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