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Activist investor Breeden Capital Management LLC reported a 7.7 percent stake in Zale Corp. and said it has held discussions with its management, the Associated Press reported.
The Greenwich, Conn.-based investment fund reported owning about 3.8 million Zale shares, bought for about $83.6 million.
Breeden believes the Irving, Texas-based retailer's shares are undervalued in the marketplace, reports said.
Zale shares jumped 4.7 percent on the news, as shareholders saw Breeden getting more involved with Zale management.
In May, Breeden succeeded in gaining two seats on the board of restaurant chain Applebee's, and earlier this month, H&R Block shareholders voted to replace three of the tax preparation firm's board members with Breeden's nominees.
Richard Breeden, who controls the fund, is a former chairman of the Securities and Exchange Commission.