Deutsche Borse duo fall on their swords

THE chairman and chief executive of Deutsche Borse have resigned after a venomous battle with rebel shareholders, sparked by the German market's abandoned £1.35bn bid for the London Stock Exchange.

Chief executive Werner Seifert is leaving immediately. Rolf Breuer, chairman of the supervisory board, will follow at the end of the year.

Deposing the two men - among the most prominent executives in Germany - is an extraordinary victory for dissident investors, led by little-known hedge fund manager TCI.

The Deutsche Borse announcement comes ahead of its annual shareholder meeting on May 25. It follows an emergency board meeting when it was made clear that it was likely to lose a key vote on whether to topple Breuer, who also chairs Deutsche Bank. That, in turn, would have made Seifert's position untenable.

Lord Levene, chairman of Lloyd's of London, quit as a director last month and three more supervisory board members are heading for the door. A successor to Seifert will be appointed from outside, with finance supremo Mathias Hlubek holding the fort.

Seifert and Breuer came under heavy fire after launching a bid proposal for the London Stock Exchange in December from shareholders who wanted capital to be returned to them instead.

Deutsche withdrew its offer in March just as rival Paris-based exchange Euronext entered the fray. Observers say there is little prospect of LSE shares, up ½p to 461¾p, regaining their peak of 590p earlier this year as Euronext now appears the only credible bidder.

For Seifert, who failed in an attempt in 2000 to merge with the LSE, it marks the end of a dream. A keen organ player, he has said he would go on the road with a band if he were fired. He could be playing his first gig sooner than he hoped.