Zales
Surprise bidding war for Zale
Posted April 13, 2010 |
US jewellery retailer Zale Corp is on the verge of a remarkable recovery after reports three powerful companies are locked-in a bidding war for the struggling chain.
Last month, analysts predicted Zale was on its last legs amid spiralling sales and store closures.
However, this week the New York Post reported three firms were in talks with Zale to take a stake in the company.
US private equity firms Centerbridge Partners, TPG and Golden Gate Capital are all reportedly competing for the chance to save Zale Corp.
“It looks like a three horse race now,” an anonymous source, reportedly close to the talks, told the New York Post, adding that other suitors such as Sun Capital and Apollo Management appear to have dropped-out after making "low-ball" offers.
Zale is looking to raise as much as $150 million to fund operations.
The company has been in the news since it sold leases on 12 of its stores in prime locations in a bid to shore-up its finances.
In a further sign of Zale’s impending doom, the company’s largest shareholder sold his stake in the company last month.
The latest development is good news for the North American luxury goods market, showing that investors see potential for recovery in the struggling sector.
Reports say the deal is likely to come within the next two weeks.
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