Multiple media sources state that Zale shareholder Mary Smart has filed a lawsuit to the Delaware Court of Chancery in the United States that claims the US$1.4 billion (AU$1.55 b) proposal is marred by a “flawed process and conflicts of interest”.
According to legal documents, Smart said directors of Zale “engaged in a process that was designed to benefit Signet and secure material personal benefits for themselves”, adding that Zale CEO Theo Killion would retain his position and “lavish compensation” as part of the acquisition.
Smart also labelled Signet’s proposed purchase price of US$21 (AU$23) per share – which values the company at approximately US$690 million (AU$764.8 m), including about US$500 million (AU$554.2 m) in Zale’s debt – as “inadequate”, saying that it “undervalues the company”.
As previously reported by Jeweller, the deal, which was announced last month, would combine Signet and Zale’s outlets worldwide for a total of 3,653 retailers. This would essentially create the largest jewellery retail group in the world, with six recognisable retail brands across three countries.
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