Reuters: Hot Stocks: UPDATE 1-Getco bids to take control of Knight Capital

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UPDATE 1-Getco bids to take control of Knight Capital Nov 28th 2012, 14:49 Wed Nov 28, 2012 9:49am EST * Getco says offer values Knight at $3.50 a share * Getco already owns 23.8 pct of Knight's shares * Knight shares up 15 pct in early trading (Adds details of offer, background on Knight) Nov 28 (Reuters) - Trading firm Getco Holding Co said it offered to take control of Knight Capital Group Inc in a deal that values the electronic trading firm at $3.50 a share, sending Knight shares up 15 percent in early trading Wednesday. Knight was forced to take on new investors following a software glitch on Aug. 1 that unleashed a flood of orders to the New York Stock Exchange, resulting in a massive position Knight had to unload at a loss, pushing it to the brink of bankruptcy. Sources familiar with the situation have said Getco and Virtu Financial LLC were interested in Knight for its market-making operation. Knight, which uses computer models to match buy and sell orders in stocks and options, executes around 10 percent of U.S. volume. The Getco offer was disclosed in a filing with the U.S. Securities and Exchange Commission. The filing included an offer letter to Knight directors dated Wednesday. Getco already owns 23.8 percent of Knight's stock, according to the filing. Getco said its offer of $3.50 a share is a 41 percent premium over Knight's closing price on Nov. 23, the day before press reports of rumors of possible offers for Knight. It said its offer was a 7.4 percent premium over Knight's tangible book value. Knight shares were up 46 cents to $3.43 in early trading on the New York Stock Exchange. The deal would add Knight's consumer franchise to Getco's industry technology, the letter said. The combined company would be a market-maker and an agent for trades across a range of markets and assets, Getco said. (Reporting By David Henry in New York; Editing by Gerald E. McCormick and John Wallace) Link this Share this Digg this Email Reprints

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