Citadel Boosts Stake in Breeden Activist Target Zale Corporation

Are things heating up at Zale Corporation (NYSE: ZLC)?

In a 13G filing Tuesday morning, Ken Griffin's Citadel LP disclosed a 5.31% stake (2,605,739 shares) in the company. The firm held 830,091 shares of ZLC at the quarter ended June 30, 2007. A 13G indicates a 'passive investment'.

Interestingly, two other notable hedge funds, SAC Capital and Breeden Capital, recently disclosed new 5%+ stakes in the jewelry retailer. Mega-hedge fund SAC, which is run by Steve Cohen, disclosed a 5.1% 'passive' stake in ZLC on 09/17. Breeden Capital, run by former SEC chief Richard Breeden, disclosed a 7.72% 'active' stake on 09/17. Breeden noted past talks with management and said they may conduct future talks.

According to Stockpickr.com, Citadel Investment Group is a $20 billion dollar Chicago-based hedge fund founded by billionaire trader Kenneth C. Griffin, and is one of the world's largest hedge funds. The firm is known for its daily trading volume, which amounts to 1-2% of daily trading activity in New York and Tokyo.