Knights reported to raise $400MM

lite1067

其实我最最奇怪的是Citadel 居然没有趁机介入。Citadel is one of the biggest market makers in equity derivatives. Buying out knights should give it a chance to dominate in more markets.



Knight Capital Group Inc. is close to winning a $400 million infusion from Chicago market maker Getgo and TD Ameritrade among others, as the stock-trading firm scrambles to raise cash in the wake of a painful technology glitch last week, according to reports on Sunday.

blackrock

有没有细节，这400M是卖股票还是借债？

dividend_growth

KCG属于债主了

lite1067

lite1067 发表于 2012-8-5 05:30 PM
其实我最最奇怪的是Citadel 居然没有趁机介入。Citadel is one of the biggest market makers in equity  ...

haha... 没猜错。Citadel 还是想掺和的，可惜被knights 看出狼子野心了。



Knight Is Said to Have Spurned $500 Million Citadel Loan

By Zachary R. Mider, Stephanie Ruhle and Saijel Kishan - Aug 7, 2012

Knight Capital Group Inc. (KCG) rejected a last-minute, $500 million rescue-loan offer from Citadel LLC on Aug. 5 as it worked on a competing plan from a group of investors, said two people with knowledge of the matter.

The loan terms would have given Citadel a minority stake in Jersey City, New Jersey-based Knight’s stock and an interest in the market maker’s HotSpot foreign-exchange subsidiary, said the people, who spoke on condition of anonymity because the talks were private. Citadel, the $12.5 billion hedge fund run by billionaire Ken Griffin, competes with Knight’s market-making and electronic-trading business.

Citadel, which had walked away from a previous round of talks on Aug. 4, made the offer as Knight Capital was completing a $400 million capital infusion from a group of investors led by Jefferies Group Inc. (JEF) That transaction, which was completed yesterday, gives the new investors rights to take a more than 70 percent stake in Knight. In Citadel’s offer, shareholder dilution would have been between 10 percent and 20 percent, according to another person familiar with the offer.

“Knight explored a wide range of alternatives,” Kara Fitzsimmons, a spokeswoman for Knight Capital, said in an e- mailed statement. “After a thorough review, Knight determined that the $400 million equity investment was the best and only alternative for the company and its shareholders.”

Katie Spring, a Citadel spokeswoman, declined to comment. Knight fell 0.3 percent to $3.06 in New York today after plunging 24 percent yesterday.

Trading Loss

Knight sought the lifeline after a programming malfunction spewed orders through exchanges Aug. 1 and saddled the company with a $440 million trading loss. The stock is down 70 percent in the past five sessions.

The Aug. 5 offer capped days of intermittent talks between Citadel’s Griffin and Knight, led by Chief Executive Officer Thomas M. Joyce. Griffin brought a team from Chicago to Knight’s headquarters on Aug. 3 to examine the trading firm’s books, said people with knowledge of the matter. Citadel had also offered a smaller loan to Knight on Aug. 3 as interim financing, an offer that Knight rejected, one of the people said.

On the afternoon of Aug. 4, Griffin and his team ended discussions and returned to Chicago, these people said.

By the time Griffin tried to re-engage by submitting the $500 million offer in the afternoon of Aug. 5, Knight was already concluding negotiations over the terms of the Jefferies investment, these people said. The Citadel loan offer consisted of a “term sheet” outlining the offer, the people said.

Knight Hires

Knight has diversified its business by offering trading services to institutional investors and adding platforms to trade currencies and fixed income. The company also expanded its market making to options and futures and has built up its a European operations.

Citadel’s electronic-trading and market-making business is a unit of Citadel Securities, which says it executes about 10 percent of U.S. equity volume, according to its website, a similar amount to Knight.

Griffin hired Knight’s Jamil Nazarali and Matt Cushman, who were managing directors at Knight’s electronic-trading group, last year to lead a new effort in quantitative trading, two months after they resigned from Knight.