Knight was left almost bankrupt this summer following a trading glitch that was estimated to have cost the firm about $440m.
Virtu, which is in competition with General Atlantic-backed Getco for the company, has received support from private equity firm Silver Lake Partners and banks including Credit Suisse, according to the Wall Street Journal.
Knight directors are said to be weighing an all-cash offer from Virtu that values the company at between $1.5bn and $1.6bn including debt, and would combine the two businesses into a privately held firm.
Getco’s bid values Knight at between $1.4bn and $1.8bn including debt,the report said, adding that Knight directors are also considering keeping the company independent.
Knight Capital appointed three new directors to its board following the disaster in August, including Blackstone managing director Martin Brand and General Atlantic advisory director Matthew Nimetz.
Those appointments were made as part of the terms of a $400m rescue deal from Wall Street firms including Jefferies, Blackstone, Getco, Stephens, Stifel and TD Ameritrade.
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