Zale pulls out of Signet merger
Signet, the jewellery group with a leading share of the United States market, has been forced back on to the acquisition train after its prospective merger partner, Zale Corporation, pulled out of talks over a £1bn-plus deal yesterday.
Hours after Signet had confirmed it was keen to join forces with its main US competitor, Zale said a merger was off the agenda. It is thought the US group was scared off by the prospect of Signet's investors pressing for generous terms in any deal after news of the discussions became public.
A deal would have linked the top two players in the US speciality jewellery market, giving them a 15 per cent share of the highly fragmented sector. Signet owns the Jared and Kay chains in the US. Neither side commented on the reasons for the talks breaking down.
City sources had suspected something was awry after Signet's shares lost much of their early gains in London. Its stock rose as high at 104p but closed up just 2.75p at 98.75p, before the after-hours announcement the deal was off. Shares in Zale, which had soared 16 per cent, crashed on the news that the talks had ended.
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