Zale Urges Stockholders to Vote FOR the
Signet Transaction that Provides Zale Stockholders with Compelling
Value
Zale Corporation (“Zale” or the “Company”) (NYSE:ZLC) today
announced that Institutional Shareholder Services (“ISS”), a
leading independent proxy voting and corporate governance advisory
firm, recommends that Zale stockholders vote “FOR” the proposed
transaction with Signet Jewelers Limited (“Signet”) at Zale’s
special meeting of stockholders scheduled for May 29, 2014.
In recommending that Zale stockholders vote “FOR” the proposed transaction, ISS stated
in its May 22, 2014 report:
“Given the significant premium of the current
offer to an already-healthy share price, which had appreciated
considerably over the prior year, and represented a premium on key
valuation multiples to other industry competitors; the board's
arguments that the business plan projections represent very
difficult stretch targets intended to challenge management rather
than guide investors; the company's most recent quarterly results,
reported Tuesday, which beat expectations on EBITDA and EPS but
missed on revenue, the key metric on which the business plan
predicated the bulk of its margin expansion over the next two
years; and the potentially significant downside risk – both in
trading prices over the near term and in achievement of the
strategic plan over the next several years – a vote FOR the
transaction is warranted.”*
In response to ISS’ positive recommendation, Terry Burman,
Chairman of the Board commented:
“We are pleased that ISS has endorsed the
Signet transaction that creates compelling value for Zale
stockholders. The Company believes that the ISS recommendation
further supports Zale’s view that this transaction is in the best
interests of Zale stockholders as it provides a substantial
premium, certain and immediate liquidity and compelling value to
all Zale stockholders. We look forward to completing the merger and
urge stockholders to follow ISS’ recommendation by voting
“FOR” the merger at the
upcoming special meeting.”
The special meeting is scheduled for May 29, 2014, at 8:00 a.m.
local time, at the Company’s executive offices, 901 West Walnut
Hill Lane, Irving, Texas 75038. Zale stockholders of record as of
the close of business on April 30, 2014, will be entitled to notice
of, and to vote at, the special meeting.
The Zale Board of Directors unanimously recommends that Zale
stockholders vote “FOR” the
proposed transaction. Under the terms of the agreement, Zale
stockholders will receive $21.00 per share in cash for each share
of Zale common stock owned.
YOUR VOTE IS IMPORTANT – PLEASE VOTE
FOR THE SIGNET TRANSACTION TODAY
Your vote is extremely important, no matter how many or how few
shares you own. The affirmative vote of holders of a majority of
Zale’s outstanding shares is required to approve the proposal to
adopt the merger agreement. Failing to vote has the same effect as
a vote against the proposal to adopt the merger agreement. Please
take a moment to vote “FOR” the
proposal to adopt the merger agreement today - by telephone, by
Internet or by signing, dating and returning the proxy card in the
postage-paid envelope provided.
For more information, please see Zale’s definitive proxy
statement, which was filed with the SEC on May 1, 2014. Zale urges
all stockholders to review the definitive proxy statement and other
materials as they contact important detailed information about the
merger agreement and the reasons why the Zale Board approved the
merger agreement. Stockholders who have any questions or need
assistance voting their shares should contact Zale’s proxy
solicitor, D.F. King & Co., Inc., toll-free at (800) 488-8095
or via email at zale@dfking.com.
* Permission to use quotation from the ISS report was neither
sought nor obtained.
About Zale
Zale Corporation is a leading specialty retailer of diamond and
other jewelry products in North America, operating approximately
1,680 retail locations throughout the United States, Canada and
Puerto Rico, as well as online. Zale Corporation's brands include
Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers,
Mappins Jewellers and Piercing Pagoda. Zale also operates webstores
at www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com,
www.peoplesjewellers.com, and www.pagoda.com. Additional
information on Zale Corporation and its brands is available at
www.zalecorp.com.
Safe Harbor for Forward-Looking Statements
Any statements in this communication about Zale’s expectations,
beliefs, plans, objectives, prospects, financial condition,
assumptions or future events or performance that are not historical
facts, including statements regarding the proposed acquisition of
Zale by Signet (the “proposed transaction”) and the expected
timetable for completing the proposed transaction that are not
historical facts, are forward-looking statements. These statements
are often, but not always, made through the use of words or phrases
such as “believe,” “anticipate,” “should,” “intend,” “plan,”
“will,” “expect(s),” “estimate(s),” “project(s),” “positioned,”
“strategy,” “outlook” and similar expressions. All such
forward-looking statements involve estimates and assumptions that
are subject to risks, uncertainties and other factors that could
cause actual results or events to differ materially from those
expressed in the statements. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements, are the following: the parties’ ability
to consummate the proposed transaction on the expected timetable or
at all; the conditions to the completion of the proposed
transaction, including the receipt of stockholder approval;
operating costs, customer loss and business disruption (including
difficulties in maintaining relationships with employees,
customers, competitors or suppliers) may be greater than expected
following the announcement of the proposed transaction; the
retention of certain key employees of Zale may be difficult; Zale
is subject to intense competition and increased competition is
expected in the future; and general economic conditions that are
less favorable than expected. Additional information and other
factors are contained in Zale’s Annual Report on Form 10-K for the
fiscal year ended July 31, 2013 and subsequent reports on Form 10-Q
and Form 8-K filed with the Securities and Exchange Commission
(“SEC”). Because the factors referred to above and other risk
factors, including general industry and economic conditions, could
cause actual results or outcomes to differ materially from those
expressed or implied in any forward-looking statements, you should
not place undue reliance on any such forward-looking statements.
Further, any forward-looking statement speaks only as of the date
of this communication, based on information available to Zale as of
the date hereof, and Zale disclaims any obligation to update any
forward-looking statement to reflect events or circumstances after
such date.
Use of Non-GAAP Financial Measures
This communication contains a non-GAAP measure as defined by SEC
rules. This non-GAAP measure is EBITDA, which is defined as
earnings before interest, income taxes and depreciation and
amortization. We believe this measure could be useful in evaluating
the merger. This non-GAAP measure should not be considered in
isolation from, or as a substitute for, financial information
presented in accordance with GAAP, including net earnings (loss).
The Company's calculation of this non-GAAP measure may differ from
others in its industry and is not necessarily comparable with
similar titles used by other companies. Please refer to the
appendix of the Company’s investor presentation, which is available
on the Company’s website at www.zalecorp.com/merger and is an
exhibit to the Current Report on Form 8-K filed with the SEC by the
Company on May 13, 2014, for a reconciliation of this non-GAAP
measure to the most comparable GAAP financial measure.
Investors and Press:Zale CorporationRoxane BarryDirector
of Investor Relations1 972-580-4391orD.F. King & Co.,
Inc.Kristian Klein, 1 212-232-2247orJoele Frank, Wilkinson Brimmer
KatcherMatthew Sherman, Kelly Sullivan, Eric Brielmann1
212-355-4449
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