Following a public bid Wednesday from Getco LLC to merge with Knight Capital group, sources close to the conversations have revealed to Bloomberg News that Knight is also entertaining a second offer from Virtu Financial. This could be the beginning of a “bidding war,” according to the report.
The Getco offer was filed publicly and outlined a deal in which Knight shares would go for $3.50 each in transferring ownership of the company to the Chicago-based electronic trading firm.
Virtu, another competitor in the market-making space, has made an offer at closer to $3 per share, said to be a cash deal, Bloomberg News reported early Thursday.
The offers have jolted Knight’s share price from the mid-$2 range to more than $3.40 during daytime trading Thursday.
Knight’s future looked questionable following a trading glitch in early August that cost the company more than $440 million, leading to a capital bailout from Wall Street competitors. The company has restated its commitment to its reverse mortgage business throughout changes to its board leadership that came following the crash.
The company could reach a decision on a deal in a matter of days, according to recent reports.
Written by Elizabeth Ecker