Knight Capital Group (NYSE: KCG) received a merger offer Wednesday from trading competitor Getco LLC. The offer reportedly values the company at $635 million and would include the purchase of company shares at $3.50 per share.

In a letter sent by Getco CEO Daniel Coleman to Knight’s board, Getco stressed the benefits such a merger would offer to stakeholders in both companies. The offer does not specify what would happen to Knight’s specific business channels, including Urban Financial Group. Coleman would assume the CEO role with Knight under the proposal.

In a statement released by Knight Wednesday the company confirmed it has received the proposal from Getco but as a matter of policy does not comment on interactions with shareholders or shareholder activities including filings.

The offer is one of two expected this week to purchase the company, which has struggled in recent months following a trading glitch in August that led to the company’s loss of more than $440 million overnight. A capital infusion from five of its Wall Street counterparts served as a lifeline shortly afterward to keep the company solvent. Reports this week indicated Virtu was also interested in making an offer. The companies have said they will consider selling off non attractive business segments following a deal closing, according to a Wall Street Journal report.

Knight Capital purchased Urban Financial Group in a deal closed in July 2010 and has previously restated its commitment to the reverse mortgage space. Chicago-based Getco is a market-maker that provides liquidity to global online trading markets.

Knight’s shares were trading up 15% Wednesday morning over the previous day’s close.

Written by Elizabeth Ecker