Tree House jumps 12%, deal with Zee Learn under SEBI scanner

Shares of Tree House jumped over 12 percent intraday on Monday. The merger deal between Zee Learn and Tree House Education and Accessories is under SEBI scanner, as per a media report. The market regulator is said to be examining delay in the transaction and why led to share sale by Tree House promoters before deal announcement.Shareholder Empowerment Services (SES) says that Zee Learn cannot go back on its decision to merge. It also pointed out that para 17 of the scheme approved by Boards does not envisage re-think.Post calling off the deal, both the stocks crashed (Zee Learning fell by 31 percent, Tree House lost 76 percent).  Earlier, Zee Learn had said that it will keep on hold scheme of amalgamation of Tree House Education with the company. Zee Learn has also re-constituted a 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 stakeholders intact. "Zee Learn will not be going ahead with the currently agreed share exchange ratio of 53 fully paid equity shares of Rs 1 each of Zee Learn for 10 fully paid equity shares of Rs 10 each of Tree House," Zee Learn  had said.Tree House’s net profit slumped 89 percent in FY16 to Rs 6.78 crore from Rs 60.88 crore in year-ago period. During the year, its PAT margin fell to 3.24 percent from 29.35 percent while revenue from operations stood at Rs 209.33 crore. The company had said that due to current economic conditions, consumer spends are weak and sluggish while bad monsoon and drought conditions in most states have worsened situation further.At 12:37 hrs Tree House Education and Accessories was at Rs 56.35, up Rs 4.35, or 8.37 percent and Zee Learn was at Rs 29.25, up Rs 0.45, or 1.56 percent on the BSE.