Tree House share price hit lower circuit on Thursday after the company informed BSE that its board has approved its merger with Zee Learn as both the companies are involved in same line of pre-school business activity. After the merger, the promoter holding will be 36.23 per cent, while 63.77 per cent will be held by the public. The deal will make the combined entity the largest pre-school chain in India.
Tree House share price slid 5 per cent, Rs 10.30, to Rs 195.90 in the early trade.
Tree House’s shareholders will 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. In Tree House, the promoters currently hold 20.54 per cent stake, while 79.46 per cent is held by the public.
Zee Learn has a net worth of Rs 234 crore, with annual turnover of Rs 121 crore. It operates the largest pre-school chain in the country under the KidZee brands with 1,500 centres. Tree House has a net worth of Rs 644.7 crore and annual turnover of Rs 207 crore. Share price of Zee Learn closed 2.43 per cent down at Rs 40.15.
For the quarter ended September 2015, Tree House Education posted net profit of Rs 12.74 crore, up 1.19 per cent, against Rs 12.59 crore in the corresponding quarter a year ago. Net profit of Zee Learn fell 5.70 per cent year-on-year to Rs 1.08 crore.