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Wednesday, December 19, 2012

Getco to purchase Knight Capital in $1.4 billion deal, (NYSE: KCG)

Knight Capital Group Inc, which was nearly brought down by a trading error in August, said it will be acquired by rival electronic trading firm Getco Holdings Co in a cash-and-stock deal that the companies valued at $1.4 billion.The offer represents a 13-percent premium to Knight's closing stock price of $3.33 on Tuesday. It's also a 51-percent premium to Knight's closing price on Nov. 23, when reports surfaced that the company was looking for buyers.The announcement comes in the wake of competing offers from Virtu Financial LLC and Getco, both of which have market-making units that compete with Knight. Knight executes about 10 percent of U.S. equity trading volume.Under the new deal, Knight and Getco will combine into a new publicly traded company. Knight shareholders other than Getco will have the right to pick either $3.75 per share in cash or one share of common stock in the new business.

Knight Capital Group, Inc. is a United States-based company that provides financial services. Shares of KCG traded higher by 6.01% or $0.2/share to $3.53. In the past year, the shares have traded as low as $2.24 and as high as $13.59. On average, 3853200 shares of KCG exchange hands on a given day and today's volume is recorded at 4139631.