Tree house says new share swap ratio to savage Zee Learn deal

treehouse

Tree House Education & Accessories Ltd today said they are changing share swap ratio with Zee Learn Ltd to salvage the merger deal and ensure consolidation of business.

“Board of directors shared that in order to move the merger ahead in the right direction and salvage the deal with ZLL, the management of THEAL had to re-work the share exchange Swap ratio,” Tree House management said today.

The companies today announced that Tree House shareholders will now get only 1 share of Zee Learn for each share of Tree House that they currently hold. Earlier, the plan was to issue 5.3 shares of Zee Learn for each share of Tree House.

However, the lucrative swap ratio had created unrest among Zee Learn shareholders.

Zee Learn, in a separate statement, said the new swap ratio will “put to rest uncertainty and anxiety within different stakeholders.”

Zee Learn also said the share swap ratio change reflected the recent deterioration in the financial performance of Tree House — a pioneer in the field of branded Kindergarten services in India.

The new share swap ratio will “help mitigate the recent developments in operational performance of THEAL over the past few quarters,” Zee said.

On its part, Tree House said it has initiated programs to bring back profitability, including closing of certain centers.

“Your company is trying to overcome the challenges faced in recent quarters by bringing in several cost control measure along with closing down of its non profitable centers.

“We believe that your company will be benefited with the merger, as the synergies arising out of amalgamation will play an important role in strengthening the company’s business and improving its operational efficiencies and future outlook,” Tree House said.



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