Virtu Financial LLC is preparing a cash takeover offer for Knight Capital Group Inc. (KCG) of about $3 a share, a person with direct knowledge of the matter said.
Virtu plans to assert in talks with Knight that the offer is more attractive than the bid announced earlier today by Getco LLC because it is for all of Knight’s shares and is more likely to be completed, according to two people familiar with the matter who spoke on condition of anonymity because the talks are private. The proposal would be financed by capital contributed by Virtu’s owner, the private-equity firm Silver Lake Management LLC, and a loan commitment led by Credit Suisse Group AG, one of the people said.
Chris Concannon, an executive vice president at Virtu, didn’t respond to a call and e-mail seeking comment. The plans were reported earlier by the Wall Street Journal.
Getco proposed a transaction in which it merges its operations with Knight, and buys half of the Knight shares not already held by Getco at $3.50 apiece in cash, leaving outside investors with the remaining listed stock. The proposal would be financed by $950 million from a “large financial institution,” Getco said.
Knight’s stock rose 15 percent to $3.40 as of 12:52 p.m. in New York after surging 19 percent in the previous two sessions, the biggest rally since 2008. The company was bailed out by six financial companies in August after losing more than $450 million in a trading malfunction.
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