Knight Capital and Getco to merge making market giant

Michael Bow
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KNIGHT Capital, the US market maker which nearly collapsed over the summer after a trading glitch, yesterday said it would merge with its rival Getco Holdings in a $1.8bn (£1.1bn) deal.

The tie-up, which will create one of the biggest electronic market makers in the world, will see Knight shareholders receive $3.75 a share, a 13 per cent premium on Knight’s closing price of $3.33 on Tuesday. The new business will be publicly listed, with Knight shareholders being offered either $3.75 a share or the option of taking one share in the new company.

Knight nearly collapsed in August after a trading glitch cost the firm $440m. It was only rescued after a consortium of investors, including Getco, paid to save it.