Oyo ends talks to acquire Zo Rooms after two years
Oyo on Friday said that it has finally ended the talks to acquire rival Zo Rooms which was started two years ago. Following the talks with Oyo, Zo was shut down by the end of 2015.
“In late-2015, Oyo explored a potential acquisition of Zo Rooms. The non-binding term sheet for this deal already stands terminated in September 2016. Following this, we tried to identify potential value in their business but could not reach an outcome. We can now confirm that Oyo has ended all discussions on the matter,” the company said in a statement.
What had fuelled the conversation around this acquisition was SoftBank’s statement in one of its earnings report in February 2016 saying that the acquisition was completed by Oyo. According to multiple reports, the deal in the works was expected to be an asset sale with the founders and the lead investor of Zo Rooms, Tiger Global receiving a combined stake of 7 percent in Oyo.
Retaliating on Oyo’s decision, a Zo Rooms spokesperson said, “As a matter of clarification, Zo states that OYO is resiling from the contractual terms after acquiring the entire ZO Rooms business by March 2016.”
“This is not an act in good faith and Zo takes a very serious view of the matter and will take all steps to protect its interests and enforce its rights,” the Zo Rooms spokesperson said in a statement.