Tree House merger with Zee Learn put on hold

Zee Learn says a reconstituted Merger Evaluation Committee would suggest ways to salvage the deal

Zee Learn today informed the exchanges that it has decided to put on hold the proposed merger of Tree House Education & 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 has 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.