While Signet has completed its purchase of Zale, the company still faces at least two legal challenges over the purchase.
And while the lawsuits have not been able to halt the acquisition—a Delaware judge blocked a bid for an injunction last week—they will likely add to its costs.
Despite last week’s shareholder vote in favor of the acquistion, the five shareholder suits filed in Delaware court following its announcement, which have been consolidated into one, persist, according to Signet’s latest SEC filing. The filing says that, in the event the merger is consummated, the suits will seek its undoing or damages.
In addition, according to a Reuters report, three investment funds, who owned 26 percent of Zale’s stock, are likely to ask to petition for appraisal rights, which would have a court or independent auditor rule on the value of the merger.
Signet and Zale have called the suits “without merit.”
While the May 29 vote in favor of the acquisition did turn out to be close—with just 53 percent voting in favor, according to the Dallas Morning News—large institutional investors seem to have carried the day for the purchase.
The acquisition has already led to one departure at Zale: Jim Sullivan, the company’s vice president, controller, and chief accounting officer, resigned on May 30, according to one of Zale’s final independent SEC filings.
In addition, all members of Zale’s board, including chairman Terry Burman, have resigned. Signet executives Ronald W. Ristau, Lynn Dennison, and Michael W. Barnes are now directors of the company.
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