Knight Said to Draw Interest From KKR, TPG, Silver Lake

KKR & Co., TPG Capital and Silver Lake are among the buyout firms that have initial interest in making an investment in Knight (KCG) Capital Group Inc., according to two people with knowledge of the matter.

The firms are taking a preliminary look at Knight and chances of a deal are small since Knight’s future is uncertain, said one of the people, who asked not to be named because the process is private. Knight, seeking a deal to survive a $440 million trading loss, has already opened its books to suitors, said two people with knowledge of the matter.

Bank of America Corp. also was among several potential partners in talks with Knight yesterday, said another person with knowledge of the matter. Knight is working with Sandler O’Neill & Partners LP as an adviser on the rescue talks, according to another.

Representatives at TPG, KKR and Silver Lake declined to comment. John Yiannacopoulos, a Bank of America spokesman, declined to comment.

Knight Capital told brokers it obtained short-term financing to fund market making, giving the firm money for today, said a person with knowledge of the matter.

Jersey City, New Jersey-based Knight, one of the biggest U.S. market makers, is exploring strategic and financial alternatives after a software malfunction cost the company almost four times what it earned last year. The firm’s shares lost 75 percent in two days after its computers flooded the market with unintended trades, sending dozens of stocks into spasms.

To contact the reporter on this story: Cristina Alesci in New York at calesci2@bloomberg.net

To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Christian Baumgaertel at cbaumgaertel@bloomberg.net