The Wall Street firm that was almost sunk last summer by a software glitch that led to massive trading losses, Knight Capital Group, Inc., announced today that it has received shareholder approval for its proposed merger with GETCO Holding Company, LLC.
The firms announced today that at the special meetings held yesterday, their respective stockholders and unitholders approved the adoption of a merger agreement unveiled late last year. And, they said that they have also received the necessary regulatory approvals from the Financial Industry Regulatory Authority (FINRA) and the UK’s Financial Conduct Authority (FCA). The transaction, which remains subject to customary closing conditions, is currently scheduled to close on July 1.
Upon the completion of the transaction, there will be no material changes to the firms’ current client offerings or services, they said, adding that they plan to “take a staged approach” to combining various business lines and services.
The initial deal valued Knight at US$1.4 billion, and called for the price to be paid in a mix of cash and stock, up to US$720 million in cash. The firms said that the exact allocation of cash will not be known until final results of the election process are determined. They expect to announce those results on July 1.
The deal comes in the wake of a problem with Knight’s trading software last August that caused it to suffer a sudden trading loss of about US$440 million, and forced it to raise US$400 million in emergency capital from a handful of Wall Street firms, including GETCO and TD Ameritrade, among others.