Tree House gives nod to the revised merger deal

After too many trials, finally Tree House Education & Accessories, a preschool chain has again announced amalgamation with the Zee Learn which has a chain of preschools and K-12 schools in India. It’s a revised merger deal between the two where Tree House will get shares of Zee Learn in the ratio of 1:1.

The stock of Tree House is witnessing a free fall since Feb 2015 from 485-490 levels to 36 levels. On Aug 17, the stock has bounced back with 15.6 per cent gain at Rs 36.55 and reported huge volumes. Moreover, Zee Learn has recovered from its double bottom at 27 levels surging 14.2 per cent at Rs 34.50 on Aug 17.

The existing shareholding of a smallcap company, Tree House, is 20.54 per cent promoters and 78.82 per cent public. Post-merger, Tree House will be dissolved without winding up, according to the scheme.

Earlier, on June 2, 2016 the merger evaluation committee of Zee Learn had asked to keep the scheme on hold. On this the BOD of Tree House had authorised amalgamation committee to suggest some way out for the recovery of the deal.

Zee Learn wished to keenly evaluate the quarterly results of Tree House for any further consideration. The company has seen a decline in its sales since September 2015 quarter and net loss in latest two quarters of March and June 2016 due to rising direct expenses.