New Delhi: Tree House Education plunged as much as 20% on Monday to 52-week low of Rs19.10 after Zee Learn called off its proposed merger and threatened to take legal recourse to seek damages from the failed deal.
In a regulatory filing on Friday, Zee Learn had said that “in the light of the recent inordinate developments at Tree House, it is withdrawing from the proposed merger process, which has been awaiting various court, shareholder and related statutory approvals".
The scrip closed down 19.92% against the previous session’s closing of Rs23.80. The shares traded between the high and low of Rs20 and Rs19.10, respectively, before closing at Rs19.10.
Following the announcement, Tree House stock breached the lower circuit limit amid high volumes.
It witnessed a spurt in volumes by more than six times on BSE. Similar movement was seen on NSE as well where the stock fell to a 52-week low of Rs19.10. Zee Learn had further warned it will seek compensation for the loss of brand image. “We reserve our right to initiate further suitable action against Tree House and its promoters for the loss of our reputation and goodwill and damages," said Zee Learn.
It said the board took cognisance of the recent adverse media reports about Tree House closing down hundreds of its play-schools abruptly, leaving parents and students high and dry with many filing police complaints against Tree House and its promoters.
It added: “The board feels that this may change the complete business dynamics of Tree House and is not in the spirit of the scheme of amalgamation signed between the two."