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Signet Jewelers To Purchase Zale Corporation In $690 Million Deal

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Signet Jewelers Limited
— which includes the Ernest Jones, H. Samuel, Jared The Galleria Of Jewelry and Kay Jewelers brands — has announced that it will acquire all issued and outstanding shares of fellow specialty retail jeweler Zale Corporation. The deal is for $21 per share in cash, or approximately $690 million.

Signet Jewelers Limited is the largest specialty jewelry retailer in the U.S., with more than 1,400 stores in all 50 states. Zale Corporation operates 1,680 retail locations throughout the U.S., Canada and Puerto Rico, as well as online. Once the acquisition is finalized, Zale Corporation brands Zales and Peoples Jewelers will operate alongside Signet brands.

The offer, which is valued at approximately $1.4 billion, represents a premium of 41% over Zale’s closing price as of Feb. 18, 2014, including debt. Golden Gate Capital, which owns approximately 22% of Zale common stock, has agreed to the terms of the sale. The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions, according to a company press release.

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“This transformational acquisition further diversifies our businesses and extends our international footprint, opening the door to greater growth and innovation across the enterprise,” said Mike Barnes, CEO of Signet. “The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees, and makes us a more attractive partner to our vendors. In addition, it allows us to better optimize our balance sheet, creating long-term value for our shareholders.”

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