London Stock Exchange chief quits

Uncertain times for the London Stock Exchange

LONDON, England (CNN) -- The London Stock Exchange Chief Executive, Gavin Casey has resigned one day after narrowly winning re-election to the board of directors.

Shareholders on Thursday voted to reject his re-election to the board in a show of hands but he survived after a ballot vote in which he won 56 percent support.

"It is absolutely right that I should resign as chief executive," Casey said in a letter.

His resignation will become effective immediately and his role will be taken over by LSE Chairman Don Cruickshank until a replacement is found.

The LSE is currently trying to fight off a £820 million hostile bid from Sweden's OM Group and this week pulled out of a proposed merger with Deutsche Borse to create a so-called pan-European market named iX.

LSE shareholders, especially retail broking firms, had been angry at the handling of the Deutsche Borse affair, which had initially been announced in May.

The LSE is now vulnerable to additional hostile bids from the New York Stock Exchange and other U.S. and European stockmarkets, including a possible hostile bid by the Frankfurt-based German Borse.

Others who could be interested are the U.S. technology stock market Nasdaq and the European consortium Euronext which combines the stock markets of Paris, Brussels and Amsterdam.

Casey was due to have stood down from his £340,000 a year post if the iX merger had gone ahead after four years in the job. His total package, including benefits, last year was £600,000.

Cruickshank had also come under attack at Thursday's meeting in London but he secured 66 percent backing.

He told shareholders the iX deal had been the right choice at the time and that he "remained convinced" that the strategy was the correct one.

Michael Marks, chairman of Merrill Lynch, was re-appointed as a non-executive director with the support of 73 percent support.

Cruickshank had insisted during the AGM that resignations were individual matters and markedly did not go any further in supporting his board.

Casey had refused to answer a shareholder question on him possibly resigning.

Shares of the LSE had jumped 150p to £30.50 on speculation that Casey would be replaced.

For more Europe news, myCNN.com will bring you news from the areas and subjects you select.

The London Stock Exchange

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.