DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 19, 2014

SIGNET JEWELERS LIMITED

(Exact name of registrant as specified in its charter)

Commission File Number: 1-32349

Bermuda	Not Applicable
(State or other jurisdiction	(IRS Employer
of incorporation)	Identification No.)

Clarendon House

2 Church Street

Hamilton

HM11

Bermuda

(Address of principal executive offices, including zip code)

(441) 296 5872

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

On February 19, 2014, Signet Jewelers Limited, a Bermuda corporation (“Signet”), and Zale Corporation, a Delaware corporation (“Zale”), issued a joint press release announcing the execution of an Agreement and Plan of Merger, dated as of February 19, 2014 (the “Merger Agreement”), among Signet, Carat Merger Sub, Inc., a Delaware corporation (“Merger Sub”) and an indirect wholly owned subsidiary of Signet. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

On February 19, 2014, Signet made available a presentation related to the Merger. A copy of the presentation is filed herewith as Exhibit 99.2 and is incorporated herein by reference.

IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC

Zale plans to file with the SEC and mail to its stockholders a Proxy Statement in connection with the proposed transaction. The Proxy Statement will contain important information about Signet, Zale, the proposed transaction and related matters. Additionally, Signet and Zale will file other relevant materials in connection with the proposed transaction pursuant to the terms the Merger Agreement. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATON ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by Zale through the web site maintained by the SEC at www.sec.gov or by phone, email or written request by contacting Zale at the following: Zale Investor Relations, 901 W. Walnut Hill Lane, Irving, TX 75038-1003, or by phone 972-580-4391, or by email ir@zalecorp.com.

PARTICIPANTS IN THE SOLICITATION

Signet, Zale and their respective directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of Zale in favor of the proposed transaction. Information about Signet’s directors and executive officers is set forth in Signet’s Proxy Statement on Schedule 14A for its 2013 Annual Meeting of Shareholders, which was filed with the SEC on April 26, 2013, and its Form 8-Ks filed with the SEC on July 9, 2013 and July 11, 2013. Information about Zale’s directors and executive officers is set forth in Zale’s Proxy Statement on Schedule 14A for its 2013 Annual Meeting of Stockholders, which was filed with the SEC on October 2, 2013, and its Annual Report on Form 10-K for the fiscal year ended July 31, 2013, which was filed with the SEC on September 27, 2013. Information concerning the interests of Zale’s participants in the solicitation, which may, in some cases, be different than those of Zale’s stockholders generally, is set forth in the materials filed by Zale with the SEC, and will be set forth in the Proxy Statement relating to the proposed transaction when it becomes available.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

Statements in this Current Report on Form 8-K regarding the proposed transaction, the expected timetable for completing the proposed transaction, future financial and operating results, future capital structure and liquidity, benefits and synergies of the proposed transaction, future opportunities for the combined company, general business outlook and any other statements about the future expectations, beliefs, goals, plans or prospects of the board or management of Signet or Zale constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “expects,” “intends,” “anticipates,” “estimates,” “predicts,” “believes,” “should,” “potential,” “may,” “forecast,” “objective,” “plan,” or “targets,” and other similar expressions) are intended to identify forward-looking statements. There are a number of factors that could cause actual results or events to differ materially from those indicated by such

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forward-looking statements, including: the ability to consummate the proposed transaction; the ability to obtain requisite regulatory approval without conditions, the ability to obtain stockholder approval, and the satisfaction of the other conditions to the consummation of the proposed transaction; the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers and competitors, and any related impact on integration and anticipated synergies; and the other factors and financial, operational and legal risks or uncertainties described in Signet’s and Zale’s Annual Reports on Form 10-K for the years ended February 2, 2013 and July 31, 2013, respectively. Signet and Zale disclaim any intention or obligation to update or revise any forward-looking statements as a result of developments occurring after the date of this document except as required by law.

In addition, please refer to the documents that Signet and Zale, respectively, file with the SEC on Forms 10-K, 10-Q and 8-K. These filings identify and address other important factors that could cause Signet’s and Zale’s respective operational and other results to differ materially from those contained in the forward-looking statements set forth in this document.

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Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1	Joint Press Release of Signet Jewelers Limited and Zale Corporation, dated February 19, 2014.
99.2	February 19, 2014 Presentation.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SIGNET JEWELERS LIMITED
Date: February 19, 2014
	By:	/s/ Mark A. Jenkins
	Name:	Mark A. Jenkins
	Title:	Signet Company Secretary & Chief Legal Officer

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EXHIBIT INDEX

99.1	Joint Press Release of Signet Jewelers Limited and Zale Corporation, dated February 19, 2014.
99.2	February 19, 2014 Presentation.

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EX-99.1

Exhibit 99.1

SIGNET JEWELERS LIMITED AND ZALE CORPORATION ANNOUNCE DEFINITIVE

AGREEMENT FOR SIGNET TO ACQUIRE ZALE CORPORATION

Transaction brings together two of today’s leading jewelry retailers with six of the most recognizable brands across three countries

Combined sales of $6.2 billion and enhanced operating capabilities expected to generate approximately $100 million in annual synergies within three fiscal years

Customers to benefit from expanded offering of innovative products and services across omni-channel presence, providing convenience and choice

Strong combined financial profile expected to achieve investment grade rating

HAMILTON, Bermuda, and DALLAS, Texas, February 19, 2014 – Signet Jewelers Limited (“Signet”, NYSE and LSE: SIG), the largest specialty retail jeweler in the US and the UK, and Zale Corporation (“Zale”, NYSE: ZLC), a leading specialty retailer of fine jewelry in North America, today announced that they have entered into a definitive agreement for Signet to acquire all of the issued and outstanding stock of Zale for $21.00 per share in cash consideration.

“This transformational acquisition further diversifies our businesses and extends our international footprint, opening the door to greater growth and innovation across the enterprise,” stated Mike Barnes, Signet’s Chief Executive Officer. “The addition of Zale to the Signet family is consistent with our long-term growth strategy and leverages our combined operating expertise to create better choices for our customers, new opportunities for our employees, and makes us a more attractive partner to our vendors. In addition, it allows us to better optimize our balance sheet, creating long-term value for our shareholders. We are excited about the prospects for the combined company and the many opportunities that this creates for our future. I am happy to say it is our intention that Zale will continue to run under current leader CEO, Theo Killion, who would report directly to me after the transaction closes.”

The acquisition strengthens Signet’s omni-channel presence with some of the most recognizable jewelry store brands in the world, each operating as stand-alone brands including: Kay Jewelers, Jared The Galleria Of Jewelry, H.Samuel, Ernest Jones, Zales, and Peoples.

“Having successfully completed our multi-year turnaround program to return to profitability, Signet’s operating strengths will enable us to accelerate Zale’s performance improvement for the benefit of our current and future guests,” commented Killion.

Signet’s offer represents a premium of 41% over Zale’s closing price as of February 18, 2014. The transaction would be valued at approximately $1.4 billion, representing an enterprise value to last twelve months Oct-13 Adjusted EBITDA¹ multiple of 7.4x². As part of the transaction, Signet has entered into a voting and support agreement with Golden Gate Capital, the beneficial owner of approximately 22% of Zale’s common stock. The transaction is expected to be high single-digit percentage accretive to earnings in the first full fiscal year after the close of the transaction, excluding acquisition accounting adjustments and one-time transaction costs.

The acquisition is expected to be financed through bank debt, other debt financing and the securitization of a significant portion of Signet’s accounts receivable portfolio.

¹  Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, taxes, depreciation and amortization, adjusted to exclude charges related to store closures

²  Pro forma for projected impact of synergies and benefit from Alliance Data Systems contract, excluding any costs to achieve and deal related expenses

The transaction is subject to Zale stockholder approval, certain regulatory approvals and customary closing conditions.

J.P. Morgan Securities LLC acted as exclusive financial advisor and provided a fairness opinion to the board of directors of Signet and J.P. Morgan Chase Bank, N.A. committed to provide bridge financing for the transaction. Weil, Gotshal & Manges LLP acted as legal counsel to Signet in connection with the transaction. BofA Merrill Lynch acted as exclusive financial advisor and Cravath, Swaine & Moore LLP acted as legal counsel to Zale in connection with the transaction.

About Signet

Signet Jewelers Limited is the largest specialty jewelry retailer in the US and UK. Signet’s US division operates over 1,400 stores in all 50 states primarily under the name brands of Kay Jewelers and Jared The Galleria Of Jewelry. Signet’s UK division operates approximately 500 stores primarily under the name brands of H.Samuel and Ernest Jones. Further information of Signet is available at www.signetjewelers.com. See also www.kay.com, www.jared.com, www.hsamuel.co.uk and www.ernestjones.co.uk.

About Zale

Zale Corporation is a leading specialty retailer of diamond and other jewelry products in North America, operating approximately 1,680 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation’s brands include Zales Jewelers, Zales Outlet, Gordon’s Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates webstores at www.zales.com, www.zalesoutlet.com, www.gordonsjewelers.com, www.peoplesjewellers.com, and www.pagoda.com. Additional information on Zale Corporation and its brands is available at www.zalecorp.com. For more information

Signet Contacts:

Investors:	James Grant, VP Investor Relations, Signet Jewelers	1 (330) 668-5412
Press:	Alecia Pulman, ICR, Inc., apulman@icrinc.com	1 (203) 682-8224
Zale Contact:
Investors and Press:	Roxane Barry, Director of Investor Relations	1 (972) 580-4391

Conference Call:

A conference call is scheduled today at 8:30 a.m. ET (1:30 p.m. GMT and 5:30 a.m. PT) and a simultaneous audio webcast and slide presentation are available at www.signetjewelers.com. The slides are available to be downloaded from the website ahead of the conference call. The call details are:

Dial-in: 1 (847) 619 6397 Access code: 36705845

IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC

Zale plans to file with the Securities and Exchange Commission (the “SEC”) and mail to its stockholders a Proxy Statement in connection with the proposed transaction. The Proxy Statement will contain important information about Signet, Zale, the proposed transaction and related matters. Additionally, Signet and Zale will file other relevant materials in connection with the proposed transaction pursuant to the terms of an Agreement and Plan of Merger by and among, Signet, Carat Merger Sub, Inc., a wholly owned subsidiary of Signet, and Zale. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATON ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Proxy Statement and other documents filed with the SEC by Zale through the web site maintained by the SEC at www.sec.gov or by phone, email or written request by contacting Zale at the following: Zale Investor Relations, 901 W. Walnut Hill Lane, Irving, TX 75038-1003, or by phone 972-580-4391, or by email ir@zalecorp.com

PARTICIPANTS IN THE SOLICITATION

Signet, Zale and their respective directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of Zale in favor of the proposed transaction. Information about Signet’s directors and executive officers is set forth in Signet’s Proxy Statement on Schedule 14A for its 2013 Annual Meeting of Shareholders, which was filed with the SEC on April 26, 2013, and its Form 8-Ks filed with the SEC on July 9, 2013 and July 11, 2013. Information about Zale’s directors and executive officers is set forth in Zale’s Proxy Statement on Schedule 14A for its 2013 Annual Meeting of Stockholders, which was filed with the SEC on October 2, 2013, and its Annual Report on Form 10-K for the fiscal year ended July 31, 2013, which was filed with the SEC on September 27, 2013. Information concerning the interests of Zale’s participants in the solicitation, which may, in some cases, be different than those of Zale’s stockholders generally, is set forth in the materials filed by Zale with the SEC, and will be set forth in the Proxy Statement relating to the proposed transaction when it becomes available.

Safe Harbor for Forward Looking Statements

Statements in this press release regarding the proposed transaction, the expected timetable for completing the proposed transaction, future financial and operating results, future capital structure and liquidity, benefits and synergies of the proposed transaction, future opportunities for the combined company, general business outlook and any other statements about the future expectations, beliefs, goals, plans or prospects of the board or management of Signet or Zale constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “expects,” “intends,” “anticipates,” “estimates,” “predicts,” “believes,” “should,” “potential,” “may,” “forecast,” “objective,” “plan,” or “targets,” and other similar expressions) are intended to identify forward-looking statements. There are a number of factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the proposed transaction; the ability to obtain requisite regulatory approval without conditions, the ability to obtain Zale stockholder approval and the satisfaction of the other conditions to the consummation of the proposed transaction; the potential impact of the announcement or consummation of the proposed transaction on relationships, including with employees, suppliers, customers and competitors, and any related impact on integration and anticipated synergies; and the other factors and financial, operational and legal risks or uncertainties described in Signet’s and Zale’s Annual Reports on Form 10-K for the years ended February 2, 2013 and July 31, 2013, respectively. Signet and Zale disclaim any intention or obligation to update or revise any forward-looking statements as a result of developments occurring after the date of this document except as required by law.

In addition, please refer to the documents that Signet and Zale, respectively, file with the SEC on Forms 10-K, 10-Q and 8-K. These filings identify and address other important factors that could cause Signet’s and Zale’s respective operational and other results to differ materially from those contained in the forward-looking statements set forth in this document.

EX-99.2

1

Combining Two of Today’s Leading Jewelry Retailers

Investor Presentation

February 19, 2014

Exhibit 99.2

2

Safe Harbor for

Safe Harbor for

Forward-Looking Statements

Forward-Looking Statements

Statements in this presentation regarding the proposed transaction, the expected timetable for completing the proposed

transaction, future financial and operating results, future capital structure and liquidity, benefits and synergies of the

proposed transaction, future opportunities for the combined company, general business outlook and any other statements

about the future expectations, beliefs, goals, plans or prospects of the board or management of Signet or Zale constitute

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that

are not statements of historical fact (including statements containing the words “expects,” “intends,” “anticipates,”

“estimates,” “predicts,” “believes,” “should,” “potential,” “may,” “forecast,” “objective,” “plan,” or “targets,” and other similar

expressions) are intended to identify forward-looking statements. There are a number of factors that could cause actual

results or events to differ materially from those indicated by such forward-looking statements, including: the ability to

consummate the proposed transaction; the ability to obtain requisite regulatory approval without conditions, the ability to

obtain Zale stockholder approval and the satisfaction of the other conditions to the consummation of the proposed

transaction; the potential impact of the announcement or consummation of the proposed transaction on relationships,

including with employees, suppliers, customers and competitors, and any related impact on integration and anticipated

synergies; and the other factors and financial, operational and legal risks or uncertainties described in Signet’s and Zale’s

Annual Reports on Form 10-K for the years ended February 2, 2013 and July 31, 2013, respectively. Signet and Zale

disclaim any intention or obligation to update or revise any forward-looking statements as a result of developments

occurring after the date of this document except as required by law.

In addition, please refer to the documents that Signet and Zale, respectively, file with the SEC on Forms 10-K, 10-Q and

8-K. These filings identify and address other important factors that could cause Signet’s and Zale’s respective operational

and other results to differ materially from those contained in the forward-looking statements set forth in this document.

3

Combining Two of Today’s Leading

Combining Two of Today’s Leading

Jewelry Retailers

Jewelry Retailers

1

Based

on

fiscal

year

2013.

Signet

fiscal

year

end

was

02/02/13

and

Zale

fiscal

year

end

was

07/31/13.

FY 2013

Revenue

$3,983 million

$1,888 million

FY 2013

EBITDA

$660 million

$68 million

1,954

1,694

Number of retail brands

17

6

Major retail brands

Geographic footprint

United States and United Kingdom

United States and Canada

Store

formats

Complementary

presence

in

different

store

formats

including

mall

formats,

off-mall

locations

and

neighborhood power centers

Company overview

Largest specialty jeweler in the U.S. and

U.K.

A

leading specialty retailer of fine jewelry in the U.S.

and #1 retailer

of fine jewelry in Canada

Employees

17,877

11,900

1

1

Number

of

retail

stores

as

of

FYE

2013

1

4

Signet is the #1 Specialty Jeweler in

Signet is the #1 Specialty Jeweler in

the U.S. & U.K.

the U.S. & U.K.

Note: Sales for Fiscal 2013.  Estimated store numbers

Fiscal 2014-end.

H.Samuel

#1 in U.K.

Sales: ~$0.4 billion

Stores: 304

Ernest Jones

#2 in U.K.

Sales: ~$0.3 billion

Stores: 179

Kay Jewelers

#1 Jewelry store in U.S.

Sales: ~$2.0 billion

Stores: 1,057 in 50 states

Jared The Galleria Of Jewelry

#1 U.S. Off-Mall Specialty

Jeweler

Sales: ~$1.0 billion

Stores: 205 in 39 states

5

The Addition of Zale Complements

The Addition of Zale Complements

Signet’s Core Growth Strategies

Signet’s Core Growth Strategies

Maximize

Mid-Market

Build upon existing growth strategies

Increase innovation and testing to drive merchandise initiatives

Explore and expand through formats, locations, product mix, field training and

marketing

Stay true to brand heritage while adapting to meet emerging needs

Build upon our service and custom jewelry capabilities

Be Best In Bridal

Approximately 50% of sales generated from bridal businesses

Dedication to superior customer service to drive long-term customer

relationships

Leading branded diamond programs supported by targeted marketing

/

advertising

Strategic diamond sourcing initiative

Offer Best-in-Class

Multichannel

Experience

Successfully integrate digital platform to drive overall eCommerce performance

and support our physical channels of distribution

Combined digital business of both companies approaching $300 million

Improve web-based functionality such as eCommerce, social media, search

engine optimization, on-line education, digital advertising, email, and mobile

customer targeting; creating a best-in-class digital ecosystem

Expand Geographic

Footprint

#1 specialty jeweler in Canada; as well as the U.S. and the U.K.

Cross-collaboration among countries creates a global platform to support

existing and possible future geographic expansion

Companies that build from core strengths create sustained value

Complementary Strengths Align to

Complementary Strengths Align to

Drive Future Growth

Drive Future Growth

Maximize

Mid-market

Iconic retail brands in U.S. & U.K.

Successful development and growth of

branded, differentiated and exclusive

merchandise (e.g. Tolkowsky, Neil Lane)

Successful development and growth

of branded, differentiated and

exclusive merchandise (e.g. Vera Wang,

Celebration Diamond)

Strong, fast-growing digital business. 

Complementary kiosk formats

Opportunity to continue optimization of

real estate portfolio

Be Best in Bridal

Expand Geographic

Footprint

Offer Best-in-class

Multichannel Experience

Iconic retail brands in U.S. & Canada

Turnaround plan well-executed by a

strong management team

Strong free cash flow generation

provides financial and capital

structure flexibility

Experienced management team

with consistently strong financial

performance record

Strong, fast-growing digital business

Best-in-class store execution and

customer service / experience

High quality, diversified store base driven

by disciplined real estate evaluation criteria

Return to profitability

11

6

7

Delivers Scale &

Geographic Expansion

Broadens geographical footprint with Zale’s locations across the United States and

Canada

Allows Signet to significantly expand into Canada via Peoples Jewellers, the #1 specialty

fine jeweler in Canada with 146 locations

A Compelling Value Proposition

A Compelling Value Proposition

Enhances Retail

Awareness Through

Additional

Complementary Banners

Zale is a value-oriented jeweler targeting the mid-market, which complements Kay and

Jared’s strategy

Signet intends to maintain the Zales brand

Strengthens Portfolio of

Leading Exclusive

Brands to Drive Future

Growth

Growing mix of exclusive brands with ability to cross-sell, expanding access to customers

Access to additional exclusive bridal designs and brands (e.g. Vera Wang), which has and

will continue to fuel growth

Opportunity to Leverage

on Mutual Expertise to

Drive Profitability

Significant opportunity to leverage a "best-in-class" operation plan built to lower costs,

expand sales opportunities and improve customer experience

Benefit from leveraging proprietary software & processes and expansion of repair services

Zale leadership team will drive the Zales North America proprietary store brand

Brings Additional and

Complementary

Management Talent and

Experience

Zale management has completed a multi-year turnaround program, which was launched in

2010 and has driven sales and returned Zale to profitability

Signet is the ideal partner to allow Zale to accelerate on this successful trajectory

Track

record

of

successful

acquisition

integration

and

execution

at

Signet

Business and Channel

Mix

Complementary formats and channel mix between Signet and Zale through malls, off-

malls, digital platforms and kiosks

The Combination Creates a More

The Combination Creates a More

Diversified Retailer…

Diversified Retailer…

1

Existing retail footprint as of 11/02/13 for Signet and as of 12/31/13 for Zale

Signet:

1,974

stores

1

Pro forma: 3,653 stores

Zale:

1,679

stores

1

Canada: 0

U.S.: 1,478

U.K. & Ireland: 496

Canada: 199

U.S.: 1,480

U.K. & Ireland: 0

Canada: 199

U.S.: 2,958

U.K. & Ireland: 496

Global

footprint

Breakdown

by

geography

Breakdown

by

format

1,974

1,679

3,653

624

3,029

624

1,055

Signet

Zale

Pro forma

Retail stores

Kiosks

U.S.

75%

U.K.

25%

U.S.

88%

Canada

12%

U.S.

81%

U.K.

14%

Canada

5%

8

…

…

With an Expanded Portfolio of

With an Expanded Portfolio of

Attractive, Differentiated and Exclusive

Attractive, Differentiated and Exclusive

Brands to Drive Future Growth

Brands to Drive Future Growth

1

For Zale corporation: as % of fine jewelry sales

2

Earliest reported date for exclusive brands sales

9

19.0%

27.4%

Jan-10

Jan-13

8.0%

11.0%

Jul-12

Jul-13

2

Key

exclusive

brands

Exclusive

brands as %

of sales¹

10

Transaction Summary

Transaction Summary

$21.00 per Zale share all cash offer, implying ~$1.4 billion enterprise value for

Zale

Represents

EV

/

LTM

Oct-13

Adjusted

EBITDA

1

multiple

of

7.4x

2

J.P.

Morgan

has

provided

new

underwritten

term

loan

facility

and

bridge

financing commitment

Strong combined financial profile allows for an all cash transaction with the

expectation to achieve investment grade rating

Golden Gate has entered into a voting support agreement

Structure and

Consideration

~$6.2

billion

in

LTM

Oct-13

revenue

3

Combined Financial

Metrics

The transaction is expected to generate approximately $100 million in annual

growth and cost synergies within three fiscal years after closing

In the first full fiscal year after close, we expect the transaction to be high

single-digit percentage accretive

4

to earnings per share

Compelling Financial

Impact

Approvals and Closing

Transaction approved by boards of directors of both companies

Subject to Zale stockholder approval

Subject to customary closing conditions and regulatory approvals

Expected to close within 2014

1

Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, taxes, depreciation and amortization, adjusted to exclude charges related to store closures

2

Last

twelve

month

(LTM

Oct-13)

based

on

Signet

LTM

as

of

11/02/13

and

Zale

as

of

10/31/13,

pro

forma

for

projected

impact

of

synergies

and

benefit

from

ADS

contract,

excluding

any

costs

to

achieve

and

deal

related expenses

3

Last twelve month (LTM Oct-13) based on Signet LTM as of 11/02/13 and Zale as of 10/31/13

4

Excluding one-time transaction costs and acquisition accounting adjustments

11

Standalone Signet

Pro Forma Signet

Additional distribution points

and geographic reach provide

solid platform for top line

growth

Operating efficiencies will drive 

margin and expense reduction

opportunities and drive value

creation

Revenue ($ billion)

EBITDA ($ million)

Standalone Signet

Pro Forma Signet

$3.3

$3.3

$3.4

$3.7

$4.0

$6.2

Jan-09

Jan-10

Jan-11

Jan-12

Jan-13

Pro forma LTM

Oct-2013

¹

$330

$373

$470

$600

$660

$745

Jan-09

²

Jan-10

Jan-11

Jan-12

Jan-13

Pro forma LTM

Oct-2013

¹

Combined Financial Overview

Combined Financial Overview

1

Last twelve months (LTM) based on Signet LTM as of 11/2/13 and  Zale as of 10/31/13

2

Excludes goodwill and relisting costs

12

Overview of Synergies

Overview of Synergies

Supply Chain / Purchasing

Signet’s manufacturing knowledge, buying processes, and

proprietary systems in partnership with Zale’s team will accelerate

and ensure gross margin improvement.

Inventory management processes will improve inventory utilization

and turn

Expense Reduction

“Best practice”

sharing will improve the cost and efficiency of

operations and advertising buys

Overhead will be optimized while strengthening the infrastructure to

support growth of the Zales brand

Estimated $100 Million Synergy Potential Provides Opportunity for

Substantial Value Creation

Service Capabilities and

Brand Cross-Selling

Opportunities to expand distribution of current brands and new brand

concepts will be created.

Signet’s repair and custom design business processes will be utilized

to improve performance.

13

Additional Business Benefits

Additional Business Benefits

Credit Optimization

The Alliance Data System agreement will improve Zales credit

offering and lower the cost of credit

Enhanced

credit

approval

rates,

strengthened

lifecycle

marketing

and

improved in-store credit presentation.

Store rationalization continues

Increasing real estate productivity via portfolio optimization, exclusive

merchandise, service expansion, credit and store infrastructure

investment

Real Estate Optimization

14

Financing and Capital Structure

Financing and Capital Structure

Expected financing includes a combination of:

Significant accounts receivable securitization

Bank debt

Other debt financing

J.P. Morgan has committed to provide financing for the

Company expected to achieve investment grade rating post

transaction

transaction given strong cash flow generation and projected

earnings growth

15

Transaction Strengthens Signet’s

Transaction Strengthens Signet’s

Foundations and

Foundations and

Unlocks New Growth Opportunities

Unlocks New Growth Opportunities

We are going to invest in and grow the Zales brand

Maintain Zales as a stand alone brand, within the Signet portfolio of brands

Optimize

marketing

and

promotional

spend

on

Zales

to

drive

brand

recognition

and

sales

Invest in store remodels and IT infrastructure to drive sales and enhance long term margin profile

Invest in new store development to optimize the network

There are significant synergies and growth opportunities

Revenue opportunities through cross selling and new business development

Operational efficiencies and best practice sharing

Reduction in overhead duplicative expenses

Enhanced customer experience

Strong liquidity position and disciplined approach to capital structure and allocation

Combined cash flow will allow for sustained deleveraging

16

Important Additional Information Will Be

Important Additional Information Will Be

Filed With The SEC

Filed With The SEC

Zale Corporation plans to file with the Securities and Exchange Commission (the “SEC”) and mail to its

stockholders a Proxy Statement in connection with the proposed transaction. The Proxy Statement will

contain important information about Signet, Zale, the proposed transaction and related matters.

Additionally, Signet and Zale will file other relevant materials in connection with the proposed transaction

pursuant to the terms of an Agreement and Plan of Merger by and among, Signet, Carat Merger Sub,

Inc., a wholly owned subsidiary of Signet, and Zale. INVESTORS AND SECURITY HOLDERS ARE

URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS CAREFULLY

WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATON ABOUT

THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Proxy Statement and other

documents filed with the SEC by Zale through the web site maintained by the SEC at www.sec.gov or by

phone, email or written request by contacting Zale at the following: : Zale Investor Relations, 901 W.

Walnut Hill Lane, Irving, TX 75038-1003, or by phone 972-580-4391, or by email 

PARTICIPANTS IN THE SOLICITATION

Signet, Zale and their respective directors, executive officers and other members of management and

employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from

stockholders of Zale in favor of the proposed transaction. Information regarding the persons who may,

under the rules of the SEC, be considered participants in the solicitation of the stockholders of Zale in

connection with the proposed transaction, and their direct or indirect interests, by security holdings or

otherwise, which may be different from those of Zale’s stockholders generally, will be set forth in the

Proxy Statement and the other relevant documents to be filed with the SEC. Information concerning the

interests of Zale’s participants in the solicitation, which may, in some cases, be different than those of

Zale’s stockholders generally, is set forth in the materials filed by Zale with the SEC, and will be set forth

in the Proxy Statement relating to the proposed transaction when it becomes available.

ir@zalecorp.com