Published November 29, 2012
A meeting of Knight Capital Group's (KCG) board of directors concluded late Thursday with no decision on whether to accept either one of two buyout offers, sources close to the matter tell FOX Business' Charlie Gasparino.
GETCO made public on Wednesday a $539 million offer to take full control of Knight. The cash-and-stock buyout bid, which was unveiled in a Securities and Exchange Commission filing, values Knight Capital at $3.50 a share.
That represents a 41% premium over the company’s close on November 23, the last day before rumors began swirling that Knight could be sold.
Meanwhile, New York-based Virtu proposed a $3.00 all-cash proposal for Knight, sources tell Gasparino. Virtu argued the all-cash deal is better than Getco’s mix of cash and stock.
In a tie-up with Virtu, Knight Capital CEO Tom Joyce would serve as one of the combined company’s top three executives, Gasparino previously reported, while Joyce would move to the non-executive chairman position in the Getco proposal.
Chicago-based Getco, which disclosed a 23.8% stake in Knight Capital, said it wishes to cement a deal by December 3.
Getco was among the firms that cobbled together a highly-dilutive rescue for Knight Capital after a software glitch over the summer nearly collapsed the company.
“I am convinced that this merger would unlock tremendous value for the shareholders of both firms while establishing a global leader in market-making and agency execution,” Getco CEO Daniel Coleman said Wednesday in the letter to Knight’s board.
Jersey City, N.J.-based Knight Capital confirmed it received the Getco proposal, but said as a matter of policy it "does not comment on interactions with shareholders or shareholder activities."
Knight suffered a trading glitch this summer in which it erroneously took a massive equity position. The episode nearly forced Knight into bankruptcy before the rescue, which included Getco and TD Ameritrade (AMTD).
In the deal laid out by Getco, Coleman would be the combined company’s CEO and the board would include four directors nominated by former Getco shareholders and three currently serving on Knight’s board.
Getco also said it would “work to ensure significant retention” of Knight’s employees. Getco said it has already lined up $950 million of fully-committed financing from an unnamed “large financial institution.”
Matt Egan contributed to this report.