Cause for thought

What has happened

With takeover talk filling the corridors of the London Stock Exchange it
can’t be easy for the man with the job of ensuring it performs well to
concentrate on the job at hand.

Jonathan Howell, who was appointed finance director of the LSE in December
1999, might have been forgiven for thinking he was set for a smoother ride after
struggling through a time of poor performance in the markets. The FTSE index
touched the 6,000 point mark again this month for the first time in five years
marking the end of a period of indifferent share prices.

The LSE has rejected bids from the Australian Bank Macquarie, and the Nasdaq
more recently. There are also suggestions that the New York Stock Exchange and
Euronext will also bid, although analysts believe the admission by the
Paris-based exchange that merger talks have started with Deutsche Borse means it
will not be a serious contender in the takeover battle.

What happens next

An improved offer from the Nasdaq is possible, even though the LSE seems to
be adamant the initial offer of 950 pence a share undervalued the company. The
implications of a takeover for Howell are unclear, with speculation centering on
what will happen to the LSE board in a takeover scenario. It will probably take
a subsidiary role to the board of the new owner.

Howell could face competition for an FD’s role in a newly-created
organisation, with Mathias Hlubek at Deutsche Borse or Serge Harry at Euronext
both touted as rivals.

The LSE has entered the FTSE 100 as takeover talk boosted the share value,
which in a way may help Howell’s cause. Any improvement in the company’s
performance will be useful to him if he is pitching for a new role.

Howell took over at a time when the index was at record levels so it is
important that he is seen to be steering it up to those dizzy heights.

With takeover speculation set to dominate the LSE scene for the next few
weeks and possibly months, Howell will certainly have plenty to think about for
his own future and for the LSE.

Curriculum Vitae

1996 Howell joined the LSE from PricewaterhouseCoopers

1998 becomes head of market regulation for the exchange

March 1999 is promoted to director of regulation for the LSE

December 1999 became financial director of the London Stock
Exchange responsible for finance and business operations

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