TIG Offers Response to Zale's 'Baffling Defense' of Signet Merger

TIG Advisors, LLC (“TIG Advisors” and together with its affiliates the “TIG Advisors Group” or “we”) a stockholder of Zale Corporation ZLC (“Zale” or the “Company”), owning approximately 9.5% of its outstanding shares of common stock, today responded to the Zale board's attempt to justify the proposed merger with Signet Jewelers Limited SIG(“Signet”) for $21 per share in cash in an open letter addressed to TIG Advisors. TIG Advisors continues to be disappointed by the Zale board's lack of constructive engagement with its shareholders. The board's open letter to TIG Advisors displayed a baffling and intransigent defense of the deal valuation and negotiation process. Far from addressing our and other shareholders' concerns, the board's letter serves to underscore our belief that the $21 per share offer is inadequate, and the process by which it was arrived at was flawed in a number of important respects. In its letter, the board continues to talk-down the prospects of Zale, ignoring its own forecasts and improving performance. Zale's Q3 earnings results released today point to a strong and vibrant underlying business, with the Company beating street estimates for EBIT, EBITDA and EPS. TIG Advisors believes that Zale is in the mid-stages of a turnaround, with substantial value creation ahead of it. Contrary to the board's assertions, TIG Advisors is acting in the interests of all of our fellow stockholders. We believe the upside potential and synergies created by the proposed merger with Signet should be shared equitably with Zale shareholders. As we have repeatedly maintained, this is the "Right Deal at the Wrong Price." The board acknowledges an 18% jump in Signet's share price on the day the merger with Zale was announced, but disingenuously attributes this value creation to a decision by Signet to increase the leverage on its balance sheet. TIG Advisors believes that the potential balance sheet enhancements by Signet were well understood, anticipated and largely priced-in by market participants. In fact, on 1/24/14, Signet issued a statement acknowledging a meeting with a significant institutional investor to discuss these items. According to Signet's statement and the investor's securities filings, the investor reviewed various strategic alternatives with Signet including “leveraging credit receivables” and “optimizing the capital structure.” We continue to believe the sustained value accretion in Signet stock since the announcement of the Zale merger is attributable to the unrecognized value in Zale and the potential synergies created by the proposed merger. Finally, the board continues to defend the participation of Golden Gate Capital's representative on the negotiation committee, claiming no conflict in having a shareholder with a stated intention to exit its position, negotiating the transaction. On the day the S-3 registration statement was filed for Golden Gate's shares, Zale's stock closed at $15.75 per share. Faced with selling their shares in a secondary offering or selling to Signet, Golden Gate had a strong incentive to favor a sale of the Company now, at the expense of maximizing shareholder value in the best interests of all shareholders. TIG Advisors is substantial stockholder, owning approximately 9.5% of the stock. We intend to vote AGAINST the $21 per share offer for Zale, and encourage our fellow stockholders to do the same. We filed proxy materials with the SEC to solicit proxies from Zale stockholders in opposition to the Signet merger. Support our efforts by voting on the BLUE proxy card by internet, telephone or mail AGAINST the approval of the Merger Agreement and related compensation proposals at the Special Meeting. Alternatively, you may use management's white proxy card to vote AGAINST the proposals. Even if you have previously deposited a management white proxy card in support of the proposals, you can still change your vote by voting your BLUE proxy AGAINST the merger. If you have any questions or require assistance in voting your proxy, we encourage you to contact Charlie Koons 212-929-5708 or Larry Dennedy 212-929-5239 at MacKenzie Partners.