Deutsche Börse came under siege from activist shareholders for the second time in four years today as Atticus and TCI demanded that the German exchange operator take urgent action to improve shareholder value and threatened to call for senior heads to roll.

The move by the two powerful hedge funds, which together own 19 per cent of the Frankfurt-based bourse, marks a repeat of their successful campaign in 2004 to derail its bid for the London Stock Exchange.

The two funds forced Deutsche Börse to scrap its £1.3 billion bid for the LSE and forced Werner Seifert, then chief executive, out of his job.

The campaign sent a shock wave through German corporate culture and contributed to the revulsion expressed among political figures towards hedge funds and private equity, with the two firms and their peers nicknamed "locusts".

Today's renewed assault on the exchange, which also subsequently failed in a bid to buy the pan-European exchange Euronext, puts Kurt Viermetz, chairman of the supervisory board, under pressure.

In a joint statement, TCI and Atticus said they would explore all options to improve Deutsche Börse's ability to create shareholder value.

"This may include seeking to change some of the members of the supervisory board in order to ensure leadership and urgency regarding any appropriate action," they said.

Bafin, Germany's financial regulator, would be informed of their position, they said, stressing that they retained the right to raise or reduce their holdings.

Deutsche Börse operates the Frankfurt Stock Exchange and the derivatives platform Eurex. It also owns Clearstream, the clearing and settlement network for trades. This ownership has been criticised on monopoly grounds in the past.

Its shares have fallen more than half since last December, partly because of the threat of competition from rivals including Chi-X and Turquoise.

Deutsche Börse declined to comment specifically on TCI and Atticus. "However, the company is in general in permanent dialogue with all of its shareholders," it said.

It added that the exchange's supervisory board was up for re-election next May and that Mr Viermetz had instructed a commission to seek potential candidates.

"Additionally, all shareholders have the right to also make their own proposals for candidates," it said.

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