Lazare Kaplan will sell 1.3 million shares of common stock to Fabrikant

Lazare Kaplan International Inc. will sell 1,305,000 shares of its common stock (including 1,180,000 of previously repurchased treasury shares and 125,000 authorized but unissued shares) at a negotiated price of $9 per share to Fifth Avenue Group, LLC. LKI intends to use the proceeds of such sale to pay down outstanding bank debt and for other general corporate purposes.

The transaction, which is scheduled to close on February 11, has among its provisions a ten-year standstill period on Fifth Avenue Group and its affiliates during which they will not acquire more than 24.9% of the outstanding shares of LKI, or participate in any proxy dispute involving the Company. Maurice Tempelsman and Leon Tempelsman who are the chairman and president of LKI, respectively, will be given a proxy vote of the treasury shares which is subject to certain limitations including an eight-year term. Fifth Avenue Group, LLC is controlled by the Fortgang family and is an affiliate of M. Fabrikant & Sons, Inc. For a complete description of the transaction and the transaction documents, reference is made to the current report on Form 8-K that will be filed shortly.

“This investment is a vote of confidence in LKI’s business strategy by one of the largest and most sophisticated diamond and jewelry companies in the industry,” said Leon Tempelsman, “We’re delighted that Fabrikant and the Fortgang family share our vision and optimism regarding LKI’s growth and look forward to further cooperation.”

Established in 1895, M. Fabrikant & Sons, Inc. purchases, manufactures and sells a full range of loose polished diamonds and other precious stones as well as diamond and gold jewelry. “We have admired the management of Lazare Kaplan for years,” said Matthew Fortgang, the president of M. Fabrikant & Sons, Inc. “We share many basic values and principles of doing business. And, we look forward to seeing LKI achieve the goals it has set for itself in a market where, given the proper resources and creativity, there are many joint opportunities for growth.”

Lazare Kaplan International Inc. sells its diamond and jewelry products through a worldwide distribution network. The Company is noted for its ideal cut diamonds, which it markets internationally under the brand name Lazare Diamonds r.