Dame Clara Furse hands over London Stock Exchange baton

Dame Clara Furse stepped down as chief executive of the London Stock Exchange yesterday, insisting that she had no regrets at snubbing takeover bids valuing the business at far more than its present worth.

Dame Clara fought off five takeover approaches during her eight years in the post, including one from Nasdaq in 2006, which valued LSE shares at £12.43. That compares with last night’s closing price of 698p, down 2p.

However, Dame Clara pointed out that the LSE’s share price hit £20 immediately before and after the Nasdaq offer, which would have represented poor value at the time.

She added: “I think the decisions that we made were well explained and very well received at the time. It is important to remember what happened to our share price.And please remember that the bid we received from Macquarie [the Australian investment bank, in 2005] was eight times leveraged and the one from Nasdaq nearly seven times leveraged — imagine where we’d be today if we’d accepted either of those bids.”

Dame Clara said that her main regret on leaving the LSE was that she had failed to persuade the Government to reduce stamp duty on share-dealing. The levy increases the cost of capital for companies and, for many of them, means that borrowing aggressively is still a cheaper option than issuing equity.

She added: “Debt-based investment, from a tax perspective, is still attractive. That would be my main regret.”

Dame Clara was speaking as the LSE reported a full-year pre-tax loss of £250.8 million, compared with profits a year earlier of £227 million, after writing down £473 million from the value of Borsa Italiana, the owner of the Milan Stock Exchange, which the LSE bought in October 2007.

Despite the writedown, Doug Webb, LSE’s chief financial officer, insisted that the intrinsic value of Borsa Italiana was “comfortably more” than the £1.3 billion at which it had been valued at the time of the deal.

Mr Webb said: “This writedown reflects the general deterioration in markets following the credit crisis. This has no impact on cashflow; nor does it have any impact on our ability to pay dividends.”

Dame Clara said: “We look on the merger with Borsa Italiana as a great success. What you can see in [these results] is the impact of the diversification of that transaction.”

Xavier Rolet, who yesterday succeeded Dame Clara as chief executive, was tight-lipped about his plans for the LSE, but emphasised that he did not see himself changing its culture significantly.

The Frenchman said: “Culture isn’t for a single person to influence. Having been here for two months has confirmed what I knew about the exchange. There has been no surprise and no discovery process.”

Mr Rolet shrugged off concern that the LSE is losing market share to rival platforms, such as Turquoise, Chi-X Europe and Bats Trading. He said: “We are in a competitive environment and we will compete, it keeps us focused. That said, there are many other elements that drive competitive performance, including technological issues, fees, the whole regulatory arena.”

Asked whether he expected to be in the job as long as Dame Clara had been, Mr Rolet said that this would depend on a number of stakeholders, including Chris Gibson-Smith, the LSE’s chairman, and its customers and shareholders.

He added: “I realise that this job is a challenge, but I hope to surprise everyone in the coming years.”

Mr Webb said that the LSE’s new trading platform Baikal — named after the world’s deepest lake, in tribute to the pool of liquidity that it will provide — would be launched at the end of June.

The facility, which Mr Webb said had cost “a small number of millions” to develop, is seen as a direct response to the likes of Chi-X Europe.

Gurjit Kambo, of Numis Securities, the stockbroker, said: “Potential regulation is expected to be positive for exchanges, but we believe the LSE’s limited exposure to derivatives and clearing, outside of Italy, leaves it less well positioned relative to other more diversified exchanges. Given the recent strong rally in the share price, we would be inclined to take profits.” link....