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Slide #94. Knight Capital Group — GETCO Holding Company, LLC
Knight Capital Group (KCG)
GETCO Holding Company, LLC
Knight Capital Group, Inc. and GETCO Holding Company, LLC announced they have entered into an agreement for a strategic business combination whereby GETCO and Knight will be combined under a new publicly traded holding company. The combined firm will create a true industry leader as an independent market-maker and agency broker across geographies, market structures and asset classes. The resulting company will benefit from Knight's deep customer franchise and GETCO's leading edge technology platform, resulting in a company extremely well positioned to serve customers across multiple products globally. Under the agreement, existing Knight shareholders (other than GETCO) will have the right to elect to receive $3.75 per share in cash or one share of common stock of the new holding company. The cash consideration will be subject to pro-ration if the holders elect to receive more than $720 million in cash in the aggregate. Jefferies & Company, Inc. and its affiliates, the largest shareholders in Knight, have agreed to limit their cash election to 50 percent of their Knight shares to the extent it is necessary to ensure that other Knight shareholders can receive their desired cash level up to the 720 million dollar aggregate amount. GETCO members will receive 233 million shares of the new holding company and the 57 million shares of Knight currently owned by GETCO will be retired. GETCO members will receive warrants in the new holding company as follows: 25 million warrants with a $4.00 exercise price and a four-year term; 25 million warrants at a $4.50 exercise price and a five-year term; and 25 million warrants at a $5.00 exercise price and a six-year term. Based on the tangible net worth of GETCO and Knight as of September 30, 2012, pro forma tangible book value of the combined company would be approximately $3.75 per share.
KCG Holdings is an independent securities firm providing clients a range of services to address trading needs across asset classes, product types and time zones. As of Dec 31 2016, Co. had three operating segments: Market Making, which principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities; Global Execution Services, which provides execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers; and Corporate and Other, which contains Co.'s investments, as well as houses executive management functions.
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Hold (2.00 out of 4)
(ranked lower than approx. 52% of all stocks covered)
Based on Zacks ABR data;
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