Blackstone consortium in $400m rescue deal for Knight Capital

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A consortium of four investors including Blackstone is reported to be preparing a $400m injection for Knight Capital that will give them control of the beleaguered broker.

Blackstone, General Atlantic-backed Getco, Ameritrade and Stifel Nicolas are understood to be buying $400m of convertible shares with a fixed coupon of two per cent with the right to buy shares in the company at $1.50, The Financial Times reported on Monday.

The price is well below Knight’s closing price of $4.05 on Friday, the report said.

The news follows a software glitch last Wednesday that cost the broker $440m and wiped out half of its market value by Friday.

The consortium will own about 70 per cent of Knight upon conversion of the bond in to shares, the report added.

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