A bidding war for Knight Capital is heating up.
The broker-dealer that was on the brink of extinction four months ago is slated to get a second offer — this one from Virtu Financial — today or tomorrow, sources familiar with the situation told The Post.
A Virtu offer to purchase the Wall Street trading firm run by CEO Tom Joyce would come as a rival offer from Getco Holding Co. — said to be a $3.50-a-share cash and stock bid — values Knight at roughly $1 billion.
Getco’s bid and Virtu’s pending all-cash offer helped pump Knight’s stock up 15.2 percent yesterday, to $3.42.
Bloomberg
It’s unknown whether Tom Joyce will survive as head of embattled Knight Capital, which has attracted two bids.
Shares of the embattled Jersey City, NJ, company are up more than 40 percent since news of a potential sale emerged.
Still, the broker-dealer’s shares are off 71 percent for the year after a technical snafu in its trading programs resulted in a massive $440 million loss.
The loss forced Joyce’s Knight to seek a white knight on Wall Street — which ended up being a Getco-led consortium.
Once the Virtu offer is submitted, Knight’s board will review both deals and make a decision by year end to either pursue a merger or remain an independent company, sources said.
Getco’s $3.50 offer translates into a relatively meager 2 percent premium to Knight’s $3.42 close.
Investors are hoping for a higher offer from Virtu.
The bid from Virtu will be $3 a share, according to reports. Shares are trading above that level, perhaps, because the Virtu offer has yet to be made official.
Although Virtu’s bid is lower, investors typically prefer the certainty of all-cash deals.
Joyce, a respected veteran among the Street equity trading houses, suffered an embarrassing fall from grace due to the trading glitch that made his firm vulnerable.
The broker-dealer is part owned by six investors, including Getco, brokerage firm Jefferies & Co., Blackstone Group, Stifel Nicolaus, TD Ameritrade and Stephens Inc.
mark.decambre@nypost.com
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