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Knight buzz continues
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September 14, 2000: 10:47 a.m. ET
Citigroup and Morgan Stanley reported to express interest in buying firm
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NEW YORK (CNNfn) - Shares of Knight Trading Group Inc. were active again early Thursday as investors weighed new takeover reports and the company remained silent on the topic.
Knight, one of the most actively traded stocks on Nasdaq Thursday morning, dropped 44 cents to $35.62.
According to a report published late Wednesday, Morgan Stanley Dean Witter (MWD: Research, Estimates) and Citigroup's (C: Research, Estimates) Salomon Smith Barney have expressed interest in acquiring Knight Trading Group Inc., but neither company has made a formal offer.
Citing people familiar with the situation, the Wall Street Journal said the companies made expressions of interest in Nasdaq's top market maker but a definitive offer is not near. A market maker offers to buy and sell stock for investors and makes a profit on the spread between a stock's asking price and offer price.
Knight, which is the top U.S. market maker, has a large number of online customers and has a consortium of 27 brokers and dealers that own about a third of the company.
Knight, commonly known as Knight/Trimark Group, did not immediately return calls requesting comment.
 Shares of Knight (NITE: Research, Estimates) rose $6.62, or 23 percent, to $36.06 Wednesday on takeover rumors. One analyst said the failure of Knight CEO Kenneth Pasternak to appear at a Merrill Lynch conference fueled speculation he was involved in takeover talks.
But unlike J.P. Morgan chairman and CEO Douglas "Sandy" Warner, who missed a scheduled appearance Tuesday and announced a $33 billion takeover by Chase Manhattan the next day, Pasternak did not confirm the market's speculations.
On Monday, Goldman Sachs paid $6.65 billion in cash and stock for competitor Spear Leeds & Kellogg LP, and in June Merrill Lynch (MER: Research, Estimates) bought Herzog Heine, the third-largest U.S. market maker for Nasdaq trading, for $900 million in stock.
According to analysts, Jersey City, N.J.-based Knight is rumored to be the next target for investment banks hoping to expand their presence in wholesale trading. 
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Knight Group
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