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Zale to buy out Piercing Pagoda for $192 million
REUTER
New York: ZALE Corp, the largest US speciality jewelry retailer, said on Friday it would buy Piercing Pagoda Inc, which sells low-priced earrings and pierces ears at mall-based kiosks, for about $192 million in cash. As part of the deal, a subsidiary of Irving, Texas-based Zale will make a tender offer of $21.50 for each Piercing Pagoda share. That price represents a premium of about 34 percent over Piercing Pagoda's closing price of 16 on the Nasdaq stock market on Thursday. Shares of Zale closed at 40-1/8 on the New York Stock Exchange on Thursday. The offer is conditioned on Zale receiving at least a majority of Piercing Pagoda's 8.92 million shares outstanding in the tender, the companies said.The deal is aimed at extending Zale's presence beyond its base of conventional shopping mall stores featuring more expensive jewelry, the company said. "This acquisition will extend Zale's `good, better, best' strategy to capture the opening price point customer while still remaining focused on our core competency of mall-based operations," Zale Corp president and chief executive, Beryl Raff said in a statement. Piercing Pagoda, based in Bethlehem, Pa, operates more than low-priced jewelry locations in 44 states and Puerto Rico under such brand names as Piercing Pagoda, Plumb Gold, Silver & Gold Connection and Diamond Isle. Zale operates about 1,390 stores in the United States, Canada and Puerto Rico under such brand names as Zales Jewellers, Gordon Jewellers, Bailey Banks & Biddle Fine Jewellers and Peoples Jewellers. The company also sells jewelry through its electronic-commerce Web site (http://www.zale.com). Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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