The world’s biggest asset manager is throwing its weight behind the chairman of the London Stock Exchange Group (LSEG) as an activist investor continues to pursue his immediate sacking.
Sky News has learnt that BlackRock, which owns roughly 10% of the company, will oppose a resolution tabled by The Children’s Investment Fund Mangement (TCI) to oust Donald Brydon at a shareholder meeting next week.
The news further reduces the chances of a big revolt against Mr Brydon’s plan to remain in place until 2019, and puts another nail in the coffin of TCI’s effort to have him voted out.
A BlackRock spokeswoman declined to comment on Wednesday.
Earlier this week, the Financial Times reported that the Qatar Investment Authority, which owns about 10.3% of LSEG, would support the incumbent chairman.
?Two influential voting advisers had already recommended opposing the TCI resolution, which was tabled amid an extraordinary campaign to get Mr Brydon sacked and reinstate Xavier Rolet, the exchange group’s chief executive.
It was forced to abandon the latter part of its efforts when Mr Rolet stepped down a year early at the request of the company’s board.
In its note to clients, the voting adviser Glass Lewis said it saw “no reason to believe that the board failed to properly oversee the company during the CEO transition process or that it failed to act in the best interest of shareholders”.
The agency also rejected the view expressed in a TCI presentation circulated last week that Mr Brydon had lost the confidence of LSEG shareholders.
“Notably, the company’s share price does not appear to have been negatively impacted by recent events including the dismissal of Mr Rolet and the CEO succession process,” it said.
“The removal of Mr Brydon at this juncture would do nothing to advance the dissident’s initial objective of reinstating Xavier Rolet as CEO of the company and would destabilize the CEO search process that is currently under way.”
Image: Donald Brydon (r) pictured with Xavier Rolet at the LSE in 2015. Pic: Royal Mail
TCI, run by Sir Christopher Hohn, had argued that Mr Brydon’s continued presence would deter the LSE’s owner from attracting a high-quality replacement for Mr Rolet.
The activist has also said that Mr Brydon had a long track record of firing chief executives at companies he has chaired, including the drinks group Allied Domecq and Smiths Group, the industrial concern.
The LSEG board has written to TCI to accuse it of “damaging” one of the UK’s most important companies by calculating “to upset the smooth execution of its succession plan” by carrying out a “public, concerted and highly personalised campaign”.
The company’s directors accused TCI of “negatively impacting Xavier Rolet’s relationships with the board and has led to pressure on the company’s relationships with its shareholders and other stakeholders”.
David Warren, the LSEG’s chief financial officer, has taken over as interim chief executive foMr Rolet’s sudden exit.
Sky News revealed recently, however, that Mr Warren has no interest in taking the job on a permanent basis.
Mr Rolet had been widely lauded for his transformation of the business into a key pillar of global markets infrastructure.
However, the row sparked by TCI’s protests at Mr Rolet’s “retirement” came as an even greater surprise to the City because he had planned to leave in any case if a merger between the LSE and Germany’s Deutsche Boerse – which was ultimately blocked by regulators this year – had been completed.
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TCI now accepts that it has no chance of winning the vote on December 19 but believes it has played an important role in holding the LSEG board to account.
The fund declined to comment.