 "Tree House Education to merge with Zee Learn")
Zee Learn today clarified the reason for putting the proposed merger of Tree House & Accessories with itself was because the fourth quarter results of Tree House were not on line with their past performance or prospects.
It said that in December 2015, when the merger was first mooted, the then performance of Tree House appeared bright and so were their prospects.
On the basis of these, independent experts had arrived at a certain merger ratio, which was approved by the boards of both the companies, subject to shareholders' approval.
"However, the Q4-FY16 results of Tree House were not in line with their past performance or prospects. Therefore, after due deliberations, the Zee Learn Board felt that this might have an impact on merger ratio agreed earlier and therefore, the Board decided to keep the Scheme of Amalgamation on hold till the advisors re-evaluate the scheme with reference to the recent developments and suggest the most appropriate way forward for Zee Learn," said a company in a press release.
The company also said that one of important roles and duties of the Board of Zee Learn, is to protect the rights and interests of its shareholders, which in light of recent developments at Tree House, may be affected if the earlier scheme / ratio is persisted with, without a review that will now be conducted.
On June 1, Zee Learn said that it has decided to put on hold the proposed merger of Tree House & Accessories with itself. This deal, announced in December 2015, was to make the combined entity the largest pre-school chain in India.
In a notification to the exchanges, the company said that as a part of the evaluation of the financial results of Tree House for the quarter ended on March 31, 2016 and for the financial year ended on March 31, 2016, the Board of Directors at its meeting held today have decided to keep on hold the merger.
Further, Zee Learn said that the Board of Directors has decided that there would be re-constitution of the Merger Evaluation Committee (MEC) with the authority to look into and suggest ways to salvage the deal with Tree House which will best keep the interest of Zee Learn's stakeholders intact.
In December last year, pre-school chain Tree House Education & Accessories had said it would merge with Zee Learn. In a statement to the stock exchanges, the two entities had said since they are both engaged in pre-school activities, they have decided to consolidate and merge.
After the merger, the promoter holding was to be 36.23%, while 63.77% was to be held by the public. The deal will make the combined entity the largest pre-school chain in India. Here, Tree House's shareholders were to receive 53 fully paid equity shares of Rs 1 each of Zee Learn for every 10 fully paid-up equity shares of Rs 10 of the former.
