Knight Capital Group’squest for a buyer will be a sprint, not a marathon.
The market making firm has hired Sandler O’Neill to find a buyer or an injection of capital, people familiar with the matter said, after Knight Currencies disclosed a $440 million loss associated with an algorithmic trading glitch. The aim: Strike a deal over the weekend, or — better yet — before the weekend.
Bulge-bracket banks would likely swarm Knight in a sale, these people said, in order to assess the firm’s electronic trading platform, viewed as a marquis asset now discounted. The likelihood of a real bid emerging from a bank — like JPMorgan Chase, Goldman Sachs, or Bank of America (all of which declined to comment) – is unclear, sources said, since the industry is caught in regulatory crosshairs and might be averse to taking unknown risks. (According to regulatory filings, JPMorgan was among firms bidding on defunct brokerage MF Global in the days leading up to its bankruptcy filing.)
Among parties assessing whether to make full or partial bids for Knight are Chicago-based Citadel Investment Group and a handful of large-cap private-equity firms, people familiar with the matter said. Citadel was canvassing the market for an advisor on Thursday, according to these people.Page 1 of 3 | Next Page