Virtu Financial is set to emerge victorious in its effort to buy rival high-frequency trading group KCG Holdings, with a deal expected to be announced on Thursday, according to people briefed on the matter.
KCG and Virtu declined to comment.
With the announcement of the takeover imminent, Charles Susi, head of institutional sales and electronic trading at KCG, announced internally that he was leaving the company, other people said.
Virtu in March made an unsolicited proposal to buy KCG for between $18.50 and $20 a share, valuing the group at more than $1.3bn.
The move comes as persistently low levels of volatility in financial markets are squeezing industry players. High-speed groups thrive during times of heavy trading and high volatility, with the period around the financial crisis having been the boom time.
KCG was born out of the merger of Knight Capital and Getco, two pioneers of using computer technology for rapid-fire trading who joined forces in 2012 after a trading glitch nearly put Knight out of business.
Virtu trades primarily for its own account whereas KCG has big business trading for clients. It is one of the largest players in wholesale trading where companies execute trades for retail houses such as Charles Schwab and TD Ameritrade.
On Wednesday, shares of KCG closed down 0.1 per cent at $17.74. Based on the closing price ahead of news of Virtu’s offer, the bid represented a premium of 31 per cent.
Virtu, which went public in 2015, fell 2 per cent to $14.95 on Wednesday, giving the company a market capitalisation of $2.1bn.