Michael Harrison's Outlook: Murdoch discovers that keeping it in the family is not always so simple

No 'FT', no Marjorie Scardino?; Stock Exchange show rumbles on

It still looks like being a long-distance event because Mr Murdoch Snr, at the tender age of 74, has shown not the slightest indication that he is even vaguely considering retirement. Had he stayed, then Lachlan, deputy chief operating officer since 2000 and publisher of the New York Post, was considered the most likely successor.

Instead, like his sister Elizabeth, he has decided to escape from underneath the large shadow cast by his father and strike out on his own. It was hard not to detect a large dollop of understatement, not to mention frustration, in Murdoch Snr's statement that he was "particularly saddened" by his son's decision.

Two down and one to go. The burden of expectation now passes to Lachlan's younger brother, James, who has been running BSkyB for the past two years after earning his spurs at News Corp's Asian satellite broadcaster, Star. The jury is still out on whether his land-grab strategy of capturing more customers at the expense of milking those it already has, is the best course for BSkyB. But still only 32, he looks impossibly young to take over the entire business in the foreseeable future.

Some say that points to News Corp's highly regarded chief operating officer, Peter Chernin, taking the helm on an interim basis when Murdoch Snr does eventually hang up his boots.

There is always John Malone waiting in the wings. His Liberty media empire owns 14.5 per cent of News Corp but Murdoch Snr would surely have to have run out of all other options before he sold his controlling 30 per cent stake to Mr Malone.

Like Lords Hanson and Weinstock before him, Mr Murdoch is discovering that building a family dynasty is one thing but handing it on is quite another.

No 'FT', no Marjorie Scardino?

Marjorie, this is Glen. Glen, this is Marjorie. She's got a Dame to her title but, like you, she's American and anyway we don't go in for all that pomp and ceremony around here at Pearson. As it happens, I'm a Lord myself but everyone calls me Dennis.

The changing of the guard yesterday at the group which owns the Financial Times could not have been a more civilised affair. Dennis Stevenson, who hands over to Glen Moreno in October, spoke of his great privilege at having chaired Pearson for eight years. Marjorie Scardino, Pearson's chief executive, praised Dennis with a fulsomeness that would not have been out of place on Oscar night and said how thrilled she was to welcome Glen Moreno into the job. Not to be outdone, the new chairman confided that he had admired Marjorie from afar for many years and looked forward to working with her. Clearly everyone is going to get along wonderfully.

That, at least, was the carefully choreographed show put on for public consumption. The likelihood, however, is that life at Pearson is going to get a whole lot more interesting from here on in. Lord Stevenson brought Dame Marjorie into the job and has resolutely defended her as the adulation which greeted her arrival turned increasingly to criticism. A generous dividend has helped Pearson outperform the media sector but its shares have gone nowhere.

In the early days she could do no wrong, selling off Madame Tussauds, Chateau Latour and Pearson's stake in Lazard, thus transforming an odd jumble of unconnected brands into a much more focussed media and educational publishing business.

But her gamble of ploughing huge sums into the internet through FT.com failed and, more recently, the book publishing arm Penguin has run into trouble at home. The FT remains part of the stable and Dame Marjorie has famously said it will be sold over her dead body.

The likelihood is that Mr Moreno, a banker who made his pile by the time he was 48 and then went on to turn Fidelity into one of the world's biggest funds, will take a much less sentimental view of the paper. Now may not be the best time in the cycle to part company with it, but there is a queue of bidders lining up and if the "Pink 'Un" does go then Dame Marjorie may not be very far behind.

Stock Exchange show rumbles on

Once the wheels of the Competition Commission begin turning they are mighty hard to stop, and yesterday out of the machine spewed its verdict on the takeover battle for the London Stock Exchange. What battle, you may ask, since Deutsche Börse abandoned its bid in March having failed to agree a price and Euronext never actually got around to making an offer. OK, the battle that might ensue now that the two putative bidders know what the rules of engagement are.

The Commission has decided that if either the Germans or Euronext are to get their hands on the LSE, then they should sell off their clearing activities, the theory being that unless they are made to do so other exchanges will find it hard to compete for business with the LSE.

The ruling is not as harsh as it might have been - the Commission could have blocked both bidders outright or imposed stringent controls on what they could charge for trading and settlement.

On the face of it, the remedy proposed by the Commission looks more difficult for Deutsche Börse to comply with. It operates what in the jargon is known as a vertical silo, where share trading, clearing and settlement is housed under one roof. Euronext operates horizontally through the ownership of separate European bourses. It does own a 41 per cent stake in LCH.Clearnet, the clearing house used by the LSE, but professes to have been thinking of selling this anyway.

Even though Deutsche's abortive bid cost its chairman and chief executive their jobs, after shareholders objected to what they saw as a waste of money, the phoney war goes on. Deutsche thinks it is in a "favourable" position to meet the Commission's concerns and continues to reserve the right to re-enter the fray if Euronext actually puts a price on the table.

All this may be no more than a bluff by Mathias Hlubek, the new man at Deutsche Börse, to make Euronext's Jean-François Theodore overpay. Meanwhile the LSE's chief executive, Clara Furse, continues to sit there with her skirt hitched up telling both boys that a marriage with either suitor "on the right terms" could be in the best interests of her shareholders and customers. Yesterday, the LSE's shares rose briskly above the 530p offer price the Germans made in March.

But surely TCI and the other Deutsche Börse shareholders who vetoed a bid then would not happily countenance a renewed offer at an even higher price. Euronext seems to think it has a chance of appeasing the competition authorities with some form of legal undertakings which stop short of divesting its LCH.Clearnet stake.

The two bidders have until the middle of September to persuade the Commission that they can meet its concerns before a final ruling is made. But don't hold your breath for a deal in short order after that. This show has been running since last December, when Deutsche Börse made its first overtures, and has further to run yet.

m.harrison@independent.co.uk

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