Top U.S. market marker Knight Capital Group said it will sell its credit-brokerage unit to Stifel Financial Corp. after reaching an agreement to be acquired by Getco Holding Co. for $1.4 billion, according to sources.
The deal will allow Stifel to pick up investment-grade, asset-backed and mortgage-backed debt brokers both in Europe and in the United States.
Knight was forced to draw additional investors and review its corporate structure after a loss of $461.1 million resulting from unintentional orders flooding into the market for 45 minutes due to a software problem.
The company has recently offered 70 percent of its stake to a group of investors including Getco in exchange for $400 million in rescue financing.
Knight uses computer models in matching buy and sell orders in stocks and options. Neither the company nor Getco commented on the sale but the deal could be announced anytime soon, sources said.
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