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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) September 20, 2000
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ZALE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 001-04129 75-0675400
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
901 W. Walnut Hill Lane, Irving, Texas 75038-1003
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (972) 580-4000
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 20, 2000, Jewelry Expansion Corp. (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Zale Corporation, a
Delaware corporation ("Zale"), acquired approximately 9,391,864 shares
(including 441,031 shares tendered pursuant to notices of guaranteed delivery)
of common stock, par value $0.01 per share (the "Shares"), of Piercing Pagoda,
Inc., a Delaware corporation ("Piercing Pagoda"). The acquired Shares
represented approximately 99.5% of Piercing Pagoda's outstanding shares and were
acquired pursuant to a cash tender offer made to all holders of outstanding
Shares for a price of $21.50 per Share, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constituted the "Offer"), each dated August 22, 2000. The Offer,
which commenced on Tuesday, August 22, 2000, expired at 12:00 midnight, New York
City time, on Tuesday, September 19, 2000.
On September 29, 2000, pursuant to the Agreement and Plan of Merger,
dated as of August 11, 2000 (the "Merger Agreement"), by and among Zale, the
Purchaser and Piercing Pagoda, the parties to the Merger Agreement effected a
merger of the Purchaser with and into Piercing Pagoda (the "Merger") without a
meeting of Piercing Pagoda's stockholders in accordance with Section 253 of the
Delaware General Corporation Law. Following the Merger, Piercing Pagoda
continued as the surviving corporation (the "Surviving Corporation") and became
a wholly owned subsidiary of Zale, and the separate corporate existence of the
Purchaser ceased. As of the effective time of the Merger (the "Effective Time"),
each Share outstanding immediately prior to the Effective Time (other than
Shares owned by Zale, Piercing Pagoda or any subsidiary of Zale or Piercing
Pagoda, which were canceled and ceased to exist) was converted into the right to
receive from the Surviving Corporation the offer price of $21.50 per share, net
to the seller in cash, less any required withholding taxes and without interest
thereon.
The total amount of funds required to purchase all of the outstanding
Shares pursuant to the Offer was approximately $208 million, plus the assumption
of approximately $55 million in debt. The Purchaser obtained all funds needed
for the Offer and the Merger through advances made by Zale. Zale obtained the
funds for such advances from its available cash and from working capital.
Piercing Pagoda is the largest retailer of gold jewelry through kiosk
stores in the United States. At March 31, 2000, Piercing Pagoda operated 940
stores in 44 states and Puerto Rico, including 907 kiosk stores and 33 in-line
stores. Piercing Pagoda offers an extensive selection of popular-priced 14 karat
and 10 karat gold chains, bracelets, earrings, charms and rings, as well as a
selection of silver jewelry, all in basic styles at everyday low prices.
Piercing Pagoda's stores are generally located in high traffic concourses of
regional shopping malls and are primarily operated under the names Piercing
Pagoda, Plumb Gold and Silver & Gold Connection.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
Not Required.
(b) Pro Forma Financial Information
Not Required.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of August 11, 2000,
by and among Zale Corporation, Jewelry Expansion Corp. and
Piercing Pagoda, Inc. (incorporated by reference to
Exhibit 10.64 to Piercing Pagoda, Inc.'s Form 10-Q for the
quarter ended June 30, 2000, previously filed with the
Commission on August 14, 2000)
99.1 Press Release announcing completion of the tender offer of
Jewelry Expansion Corp., dated September 20, 2000
(incorporated by reference to Exhibit 99.(a)(15) to the
tender offer statement on Schedule TO filed by Zale
Corporation and Jewelry Expansion Corp. on September 20,
2000)
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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.
ZALE CORPORATION
(Registrant)
Dated: October 5, 2000 By: /s/ Alan P. Shor
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Alan P. Shor, President and
Chief Operating Officer