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Zale Spikes on Report of Equity Interest

Zale is in talks with three private equity firms to purchase a minority stake in the jeweler.



) --



is spiking after reports indicated that three finalists are in the running to purchase a stake in the flailing jeweler.

Private equity firms TPG, which owns a stake in

Neiman Marcus

, and Golden Gate Capital are two of the companies in discussions with Zale,

Bloomberg News

reported Wednesday, citing three people with knowledge of the situation.

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Zale could reportedly sell a minority stake between $100 million and $150 million.

Last month it was reported that Zale was in talks with Sun Capital Partners, but


said it is not one of the finalists.

The news comes as Zale is currently deciding whether or not to pay a $6 million Citibank fine to handle its credit card business. At the end of March, Zale extended the due date for the fee to the end of April.

A bulk of Zale's sales are made through credit cards, and without the financing it could lose a significant portion of its business.

Shares of Zale are surging by 21.8% to $3.57 in afternoon trading.

-- Reported by Jeanine Poggi in New York.

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