Instinet on the Block

Silver Lake Partners is ready to cash in on its move into the trading business.

The private equity firm has put stock broker Instinet on the block and is also selling part of its stake in the Nasdaq Stock Market (NDAQ - Cramer's Take - Stockpickr).

A spokesman for Instinet, which is owned by private equity firm Silver Lake, said Tuesday that the company is considering a sale or an IPO. But the firm could also decide to do nothing. Instinet has "been approached with several inquiries" about selling the company and is "weighing its options," the spokesman said.

Silver Lake owns more than 65% of Instinet, and the remaining shares are owned by management, according to the spokesman.

Sources close to the company say that non-U.S. based brokers, such as ABN Amro(ABN - Cramer's Take - Stockpickr), might be particularly interested in the company, because of Instinet's specialty in trading foreign stocks. Another interested party could be Knight Capital(NITE - Cramer's Take - Stockpickr), the big Nasdaq trading firm, according to some specialists.

Silver Lake bought Instinet last December for $208 million as part of an investment in the Nasdaq Stock Market. Instinet is now an independent private company owned by Silver Lake.

Meanwhile, Instinet, which is also a large owner of Nasdaq shares, has recently unloaded a chunk of shares. According to a filing with the Securities and Exchange Commission late Monday, Instinet sold over 600,000 shares of Nasdaq last week, a stake worth nearly $18 million. Silver Lake also owns a large stake in Nasdaq through convertible notes that on an as converted basis make up over 11 million Nasdaq shares. Silver Lake's direct investment in Nasdaq has not changed as a result of Instinet's recent sale of shares.