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Getco Proposes Buying Knight Capital With Cash, Stock

Getco LLC, the Chicago-based high-frequency trader, offered to buy Knight Capital Group Inc. for cash and stock worth about $1 billion, setting the stage for a bidding war with Virtu Financial LLC that may end Knight’s 17-year history as an independent company.

The cash and stock transaction would pay holders of the Jersey City, New Jersey-based firm $3.50 a share, an 18 percent premium from yesterday’s close, and retain its public listing, according to a filing today from Getco. Virtu is preparing a cash takeover offer for Knight of about $3 a share, a person with direct knowledge of the matter said. Knight was bailed out by six financial companies in August after losing more than $450 million in a trading malfunction.