(IDEX Online News) – A Zale Corp shareholder is trying to prevent Signet Jewelers Ltd. $1.4 billion acquisition of the company, claiming the deal undervalues the smaller retail jewelry chain.

 

The deal has a “flawed process and conflicts of interest,” shareholder Mary Smart claims in a proposed group lawsuit, Bloomberg reported.

 

The directors of Zale “engaged in a process that was designed to benefit Signet and secure material personal benefits for themselves,” Smart claims in the filing, adding that Zale CEO Theo Killion will retain his position and “lavish compensation” as part of the deal.

 

Signet, the largest jewelry chain in the U.S., announced last month that it would pay $21 per share in cash for the acquisition, which would also include about $500 million in Zale’s debt.

 

The deal gives Signet more than 1,600 retail locations owned by Zale in addition to its 1,900 stores.