Bishop Research and Analytics
May 29, 2014, 5:22 PM
- Signet Jewelers (SIG) completes its $1.46B acquisition of Zale (ZLC) after winning approval from a majority of ZLC shareholders. overcoming opposition from some major shareholders (I, II) and proxy adviser Glass Lewis.
- SIG, already the largest U.S. operator of jewelry stores before the deal, is now nearly 3x bigger than the upscale Tiffany (TIF) in terms of U.S. sales, with a 14.6% market share.
- SIG says it expects the acquisition will increase its per-share earnings in the high single-digits on a percentage basis after a year, and generate cost savings of $100M after three years.
- SIG +3.5% in today's trade.
May 23, 2014, 6:16 PM
- Mario Gabelli becomes the second large Zale's (ZLC) shareholder to come out against the proposed sale to Signet (SIG), saying he may seek a second opinion on the deal's $21/share price in court.
- Gabelli, whose funds own 7.45% of ZLC, says in an SEC filing he had "commenced the process to be able to assert appraisal rights" - a legal process that lets shareholders reject a merger deal and instead ask a judge to independently value their shares.
- Another large Zale investor, TIG Advisors, is trying to rally opposition to the sale ahead of a vote set for next Thursday, but Golden Gate Capital, which controls 23% of ZLC, plans to vote in favor of the deal.
May 9, 2014, 5:54 PM
- Zale (ZLC) investor TIG Advisors urges shareholders to join it at a special May 29 meeting of shareholders in opposing a $1.4B takeover by Signet Jewelers (SIG), arguing that the $21/share offer is "grossly unfair."
- Instead of the price the two diamond sellers agreed upon, TIG says it should be able to get $28.60/share in cash and stock, according to an SEC filing from the 9.5% owner of ZLC shares.
- ZLC rose 3.2% today, rising sharply toward the end of the session after TIG filed its position; SIG closed 1% lower.
Feb. 19, 2014, 3:17 PM
- The merger between Signet (SIG +18.5%) and Zale (ZLC +40.2%) gives the combined company extra clout when sourcing its products, according to Citigroup.
- The investment firm also likes the ability of brands to be cross-sold in new channels and for the jewelry sellers to strike synergies in key areas.
- A rationale reduction of Zale's store count will create even more upside.
- The clash of cultures shouldn't be too great with execs swapping back and forth between Zale and Signet over the years. Zale’s non-executive chairman, Terry Burman, is former Signet CEO.
Feb. 19, 2014, 7:37 AM
- Signet (SIG) confirms its acquisition of Zale (ZLC) in a transaction valued at close to $1.4B. Large Zale stakeholder Golden Gate Capital is on board with the deal.
- The company expects to finance the transaction through bank debt and a securitization of its accounts receivable portfolio.
- The merger is expected to be accretive in the first year at a high single-digit percentage.
- What to watch: Zale's international business and strong online business strengthen a couple of areas Signet had room to improve. The combined company will also yield some improved pricing power.
- Premarket action: ZLC +40.8% to $20.99 and SIG +11.0% to $88.
Feb. 19, 2014, 7:24 AM
Feb. 16, 2012, 10:06 AM
M&A chatter keeps percolating along (previous) on a possible merger between Zale (ZLC +5.1%) and Signet (SIG +2.1%). Despite a hefty long-term debt load, Zale makes for an attractive play at $5 or $6 a share for Signet in a deal that could be accretive to earnings in the first year.| Feb. 16, 2012, 10:06 AM
Feb. 16, 2012, 8:22 AM
Zale (ZLC) +5.4% premarket on speculation that the jeweler could prosper in a marriage to larger rival Signet (SIG). "The Zale name has taken a beating, but it's still a brand that people know," one investment banker says. "Signet is more skilled at marketing, so with them at the helm at Zale, it could become a prominent name again." SIG -0.6% premarket.| Feb. 16, 2012, 8:22 AM