Getco Holding Co. has made a bid to merge with Knight Capital Group in a deal that would pay $3.50 a share for Knight's stock, an 18 percent premium over Tuesday's stock price. The deal values Knight at around $635 million.

Read MFWire's living timeline for the full, ongoing story on the Knight disaster and rescue.

The Wall Street Journal broke the story of a possible Knight merger on Friday, which identified Getco and Virtu Financial LLC as the firm's two suitors. The news of Getco's bid was carried in the Journal, Bloomberg, the Financial Times, and the NY Times, among other outlets.

Spokespeople for Getco and Knight did not immediately respond to MFWire's requests for comment.

The proposed deal is a reverse merger in two steps. The first step would involve Getco stockholders receiving newly issued Knight shares, and the second would be a tender offer for the remaining Knight shares. Getco said that it has lined up about $950 million in financing for the merger.

Under the terms of the deal, Getco CEO Daniel Coleman would run the combined company, and Knight CEO Tom Joyce would be chairman of the board, according to the Journal.

Knight is one of the largest ETF market makers, and Getco was one of six firms that bailed Knight out after a trading glitch nearly brought the firm down.

Will Virtu or another suitor try to beat Getco's offer? Check back at MFWire. 

Edited by: Chris Cumming


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