Shares of KCG Holdings Inc.
soared 11% toward a record high in premarket trade Thursday, after the securities trading company agreed to be acquired by Virtu Financial Inc.
in a deal valued at $1.4 billion. Under terms of the deal, Virtu will pay $20 for each KCG share outstanding, which is 13% above Wednesday’s closing price of $17.74. Virtu plans to fund the deal by borrowing $1.65 billion and with the sale of $750 million worth of its stock at $15.60 a share, which is 4.3% above Wednesday’s closing price of $14.95. Virtu expects the deal, which is seen closing during the third quarter, to eventually boost earnings per share by 25%. Separately, Virtu said it expects to first-quarter total revenue of $147.3 million and net income of $21.3 million. Virtu’s stock surged 4.7% ahead of the open. Year-to-date, KCG shares have run up 34% through Wednesday, while Virtu’s stock has lost 6.3% and the S&P 500
has gained 4.4%.