Trading firm Getco Holding Co offered to take control of Knight Capital Group Inc in a deal that it said valued the electronic trading firm at $3.50 a share, sending Knight's shares up more than 20 percent in premarket trading on Wednesday.
Jersey City-based Knight was forced to take on new investors following a software glitch on August 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.
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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.
(Reporting By David Henry in New York; Editing by Gerald E. McCormick)