SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Schedule 14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement
Under Section 14(d)(4) of the
Securities Exchange Act of 1934
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Piercing Pagoda, Inc.
(Name of Subject Company)
Piercing Pagoda, Inc.
(Name of Person(s) Filing Statement)
Common Stock, par value $.01 per share
(Title of Class of Securities)
720773100
(CUSIP Number of Class of Securities)
John F. Eureyecko
President and Chief Operating Officer
3910 Adler Place
Bethlehem, Pennsylvania 18017
Telephone: 610-691-0437
(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person filing statement)
With a copy to:
Jason M. Shargel, Esq.
Wolf, Block, Schorr and Solis-Cohen LLP
1650 Arch Street
22nd Floor
Philadelphia, Pennsylvania 19103-2097
Telephone: 215-977-2000
/X/ Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
<PAGE>
August 11, 2000
Dear Fellow Piercing Pagoda Employee,
We have just announced that Piercing Pagoda, Inc. will join Zale
Corporation. We are very pleased with this transaction for both our employees
and our stockholders. Zale Corporation is clearly the leader in the jewelry
industry and has a proven track record of growing and expanding its brands.
Zale's expertise in our industry will allow Piercing Pagoda, Inc. to further
maximize its potential in the marketplace.
Zale Corporation operates 1,390 specialty retail stores located throughout
the United States, Canada, Puerto Rico and online, including Zales Jewelers,
Zales Outlet, Zale.com at www.zales.com, Gordon's Jewelers, Bailey Banks &
Biddle Fine Jewelers and Peoples Jewelers. The addition of Piercing Pagoda will
extend Zale's "good, better, best" strategy to capture the opening price point
customer while still remaining focused on core competency of mall based
operations.
Each of you has consistently and successfully contributed to our success
story. Thank you for your continuing contribution to that success. We are
looking forward to this opportunity, and know that, with your support, it will
be successful.
Sincerely,
/s/ Richard H. Penske /s/ John F. Eureyecko
Richard H. Penske John F. Eureyecko
Chairman/CEO President/COO
<PAGE>
CONTACT: Investor:
Cynthia T. Gordon
Senior Director, Investor Relations
(972) 580-5047
Media:
Mary Forte`
Executive Vice President and
Chief Administrative Officer
(972) 580-4810
For Immediate Release
ZALE CORPORATION ANNOUNCES DEFINITIVE AGREEMENT TO
ACQUIRE PIERCING PAGODA, INC.
DALLAS, Texas, August 11, 2000 -- Zale Corporation (NYSE: ZLC), the largest
specialty retailer of fine jewelry in North America, and Piercing Pagoda, Inc.,
(NASDAQ: PGDA), the largest specialty retailer of gold jewelry operating through
kiosks and traditional stores in the United States, today announced that they
have entered into a definitive agreement for Zale to acquire Piercing Pagoda.
Under the terms of the agreement, a subsidiary of Zale will commence a
tender offer for all of the outstanding shares of Piercing Pagoda common stock
at $21.50 per share in cash. The tender offer will be subject to at least a
majority of the outstanding Piercing Pagoda shares, on a fully diluted basis,
being validly tendered and not withdrawn. The tender offer will also be subject
to regulatory approvals and other customary conditions.
"I am very excited about the opportunity to further our long term strategic
objectives with the purchase of Piercing Pagoda, the leader in the kiosk
segment," said Robert J. DiNicola, Chairman of the Board of Zale Corporation.
"This business is extremely synergistic with our existing portfolio and this
acquisition provides us yet another avenue to apply our retailing skills for
increased shareholder returns."
"This acquisition will extend Zale's `good, better, best' strategy to
capture the opening price point customer while still remaining focused on our
core competency of mall based operations," commented Beryl Raff, President and
CEO of Zale Corporation.
-more-
<PAGE>
Zale Announces Agreement to
Acquire Piercing Pagoda, Inc.
Page Two
"We are very pleased with this transaction for both our shareholders and
our employees. Zale Corporation is clearly the leader in the jewelry industry
and has a proven track record of growing and expanding its brands. Zale's
merchandising and marketing expertise will allow Piercing Pagoda to further
maximize its potential in the marketplace," said Richard Penske, Chairman of the
Board and CEO of Piercing Pagoda, Inc.
Zale Corporation will host a conference call at 9:30 a.m. today EST.
Parties interested in joining in on the call should phone 952-448-4698 today at
or after 9:30 a.m. EST. For anyone unable to participate in the call, a replay
will be available until the end of business on August 18, 2000. For further
information, contact Investor Relations.
Piercing Pagoda currently operates over 940 stores in 44 states with 12
locations in Puerto Rico. The company primarily operates under the names
Piercing Pagoda, Plumb Gold, Silver & Gold Connection and Diamond Isle, and
offers an extensive selection of popular priced 14 and 10 karat gold chains,
charms, bracelets, rings and earrings, as well as a selection of silver and
diamond jewelry.
Zale Corporation operates approximately 1,390 specialty retail jewelry
stores located throughout the United States, Canada, Puerto Rico, and online,
including Zales Jewelers, Zales Outlet, Zale.com at www.zales.com, Gordon's
Jewelers, Bailey Banks & Biddle Fine Jewelers and Peoples Jewellers. Additional
information on Zale Corporation and its operations is available on the Internet
at www.zalecorp.com.
This release includes certain forward-looking statements, including
expectations for future revenue; growth in Zale's customer base on store
expansion arising from the acquisition of Piercing Pagoda, Inc. by Zale
Corporation, that are based upon management's beliefs as well as on assumptions
made by and data currently available to management. These forward-looking
statements are subject to a number of risks and uncertainties, including but not
limited to the following: the possible inability of Zale to complete the
acquisition of Piercing Pagoda, Inc., the risks and uncertainties associated
with the integrating the two companies and retaining key personnel, and the risk
factors listed from time to time in the Company's Securities and Exchange
Commission reports, including but not limited to, its Annual Reports on Form
10-K. Actual results may differ materially from those anticipated in such
forward-looking statements. The Company undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent events or
circumstances, even if subsequent events or circumstances make it clear that any
projected results expressed or implied therein may not be realized.
-more-
<PAGE>
Zale Announces Agreement to
Acquire Piercing Pagoda, Inc.
Page Three
Piercing Pagoda shareholders are advised to read the tender offer statement
regarding the acquisition of Piercing Pagoda, referenced in this press release,
which will be filed by Jewelry Expansion Corp. and Zale with the U.S. Securities
and Exchange Commission and the related solicitation/recommendation statement
which will be filed by Piercing Pagoda with the Commission. The tender offer
statement (including an offer to purchase, letter of transmittal and related
tender offer documents) and the solicitation/recommendation statement will
contain important information which should be read carefully before any decision
is made with respect to the offer. These documents will be available at no
charge at the SEC's website at www.sec.gov.
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