Ever since that day in August when Knight Capital Group Inc. (NYSE: KCG) got slammed with a $460 million loss due to a nasty trading program error, investors have been waiting for the bids to come in to take over the stock trading company and market maker. The first bid is now on the table.

Privately held high-frequency market-making firm Getco Holding Co. has offered to merge with Knight in a transaction that values Knight’s stock at $3.50 a share. That’s a far cry from the price before the massive loss of more than $10 a share, and the good news is that it may just be the starting point for a number of competing bids.

Other firms believed to be mulling over an offer include Jefferies Group Inc. (NYSE: JEF), TD Ameritrade Holdings Inc. (NASDAQ: AMTD), Stifel Financial Corp. (NYSE: SF), and even The Blackstone Group LLC (NYSE: BX), all of which contributed to the $400 million rescue fund for Knight following the August disaster. That rescue package diluted existing investors by more than 70%, which is about where the Getco bid is coming in. There’s no reason to believe that this is the final offer for Knight, not with that much headroom.

Shares of Knight are up more than 14% today, at $3.39 in a 52-week range of $2.24 to $13.59. Knight has also today postponed its analyst and investor conference originally scheduled for December 3rd.

Paul Ausick

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