Troubled jewelry chain Zale Corp.’s board rejected a Leon Black proposal, but said it is considering another less-ambitious financing proposal from Sun Capital Partners, according to the Wall Street Journal.
Slowing sales, profit losses and mounting debt over the last two years has tarnished the Texas-based jewelry chain, which recently hired investment banking advisers Peter J. Solomon last month to help it solve its cash woes.
Under the Sun Capital proposal, the firm would invest between $50 million and $100 million for preferred stock that could ultimately give it a majority stake in Zale. Black’s Apollo Management recently submitted a proposal to buy a stake and sell Zale’s Canadian operations to raise cash to run the business, according to people familiar with the matter.
None of the parties would comment.