01 September 2014

Getco makes Knight Capital bid

28 November 2012  |  3919 views  |  0 Stock exchange numbers

High Frequency trading firm Getco has made a $3.50 a share offer for Knight Capital Group, which it helped rescue from bankruptcy over the summer.

Getco's cash and stock offer - valuing Knight at around $1 billion and an 18% premium on yesterday's closing price - would see the firm retain its public listing.

According to Bloomberg, the deal would be a two-step reverse merger: Getco would receive 242 million newly issued shares and warrants to buy 69 million more before making a tender offer for up to 154 million Knight shares at $3.50.

Getco's existing stake in Knight - about 57 million shares, or 24% - would be retired.

The holding was acquired in August when Getco joined six other firms in a $400 million bailout of Knight after a bungled trading software update affected its algorithms and sent prices in stocks haywire, costing the market maker $440 million and bringing it to the edge of bankruptcy.

In a letter, Daniel Coleman, CEO, Getco, says: "The combined company would be a leader in market-making and agency execution. The integration of our firms' operations would generate substantial earnings accretion going forward."

Coleman is widely expected to face competition though, with a second offer predicted to come from trading firm Virtu Financial later this week.

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Related blogs

Create a blog about this story (membership required)

Related stories

21 September, 2012
06 August, 2012
02 August, 2012
23 March, 2012

Related company news

 

Who is commenting?

Featured job

Depending on experience
London-UK

Find your next job