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KCG Looking for Buyers for HotSpot Platform

Trading firm KCG Holdings Inc plans to raise more than $300 million from the sale of its FX unit, according to sources privy to the matter.

KCG is partnering with Jefferies Group LLC as it seeks potential buyers of its HotSpot platform. Such buyers include Intercontinental Exchange Inc, CME Group Inc., NASDAQ OMX Group Inc, London Stock Exchange and Deutsche Boerse AG.

However, the search for potential buyers has been widened to include other securities companies, with first-round bids scheduled for November. The news sent KCG’s shares soaring 1.1 percent to $10.86 at 3:16 p.m., New York time, valuing the firm at approximately $1.3 billion.

HotSpot has at least 30 currency prime brokers who avail funds for trading, and has clients such as high-frequency trading companies, banks, corporations and hedge funds. Knight Capital acquired HotSpot in 2006 in a deal valued at $77.5 million.

KCG also announced that it posted a $9.6 million loss in the third quarter, down from a $227.8 million profit a year ago. The company dismissed 4 percent of its workforce, while more than five senior managers resigned in September.

KCG was created in 2013 following a decision by Knight Capital to look for a buyer after losses nearly grounded the company’s operations.

When contacted by reporters, representatives for NASDAQ, KCG, Deutsche Boerse and CME Group refused to comment while those for Intercontinental Exchange, Jefferies and the Intercontinental Exchange were unavailable for a comment.

Meanwhile, Cantor Fitzgerald has appointed Peter Gombocz as the Managing Director and Head of Electronic and Program Sales and Trading. Gombocz will work under Laurence Rose, the President and CEO of Cantor Fitzgerald Canada Corporation.

 

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