Knight Capital/GETCO Update

by Ron Finberg
Knight Capital/GETCO Update

One of the big topics as Knight Capital became in play is what a deal would have on the firms non-equity units. Most equity analysts following the company have concluded that Hotspot FX and Bondpoint Trading units were on the block to be sold. As mentioned on Wednesday, in a note to clients, Niamh Alexander, Analyst at Keefe, Bruyette, & Woods wrote “Given some of the $720 million of cash payout will be funded with borrowed cash, we would anticipate some of the electronic businesses might be sold to help pay down debt used to finance the deal." This was one of the more compelling reasons being offered as to what would trigger a sale. Also as Hotspot and Bondpoint offer leading technology within their industry has made the units attractive to outside buyers. Then again, it could also lead GETCO/Knight to decide to keep them as well.

When asked about the effects of the announced Merger on Knight's non-equity divisions, and specifically Hotspot FX, Kara Fitzsimmons, Managing Director of Media Relations at Knight Capital declined to comment.

One item to keep in mind is that with the merger expected to take several months to close, neither Knight or Getco are in an pressing state to push an asset sale. Also, with the ICE and NYSE Euronext hooking up yesterday, it represents that it is a sellers market and Leads to being patient making more sense for the combined GETCO and Knight Capital.

One of the big topics as Knight Capital became in play is what a deal would have on the firms non-equity units. Most equity analysts following the company have concluded that Hotspot FX and Bondpoint Trading units were on the block to be sold. As mentioned on Wednesday, in a note to clients, Niamh Alexander, Analyst at Keefe, Bruyette, & Woods wrote “Given some of the $720 million of cash payout will be funded with borrowed cash, we would anticipate some of the electronic businesses might be sold to help pay down debt used to finance the deal." This was one of the more compelling reasons being offered as to what would trigger a sale. Also as Hotspot and Bondpoint offer leading technology within their industry has made the units attractive to outside buyers. Then again, it could also lead GETCO/Knight to decide to keep them as well.

When asked about the effects of the announced Merger on Knight's non-equity divisions, and specifically Hotspot FX, Kara Fitzsimmons, Managing Director of Media Relations at Knight Capital declined to comment.

One item to keep in mind is that with the merger expected to take several months to close, neither Knight or Getco are in an pressing state to push an asset sale. Also, with the ICE and NYSE Euronext hooking up yesterday, it represents that it is a sellers market and Leads to being patient making more sense for the combined GETCO and Knight Capital.

About the Author: Ron Finberg
Ron Finberg
  • 1983 Articles
  • 8 Followers
About the Author: Ron Finberg
  • 1983 Articles
  • 8 Followers

More from the Author

Institutional FX

!"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|} !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`abcdefghijklmnopqrstuvwxyz{|}