Xueda Education Group (ADR) (NYSE:XUE) Agrees To A $350 Million Go Private Deal

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Dallas, Texas 07/28/2015 (Financialstrend) – Xueda Education Group (ADR) (NYSE:XUE) is the latest Chinese company to agree to a go-private deal having reached a definitive agreement to be acquired by Tsinghua Unigroup Ltd.  The deal, on the other hand, reiterates belief that there is still some value to be unlocked from Xueda Education even though the stock has been an under-performer in the recent times.

 Terms of the Transaction

The transaction believed to be worth $350 million will result in the delisting of the Xueda Education Group (ADR) (NYSE:XUE) from the New York stock exchange. Under the terms of the agreement holders of Xueda ordinary shares are to receive $2.75 a share as well as $5.50 per American Depositary share of the company.

There is already some indication that the Xueda may end up being listed in the Shenzhen stock index later in the year.  Many Chinese companies are opting to go back home swayed by the improved valuations levels there.

 Chinese Companies Exit

Two dozen non-binding offers have already been tabled with the intention of taking most of the Chinese companies trading in the US private. The deals are valued at $30 billion according to Dealogic data compared to just one deal that was made last year valued at $660 million.

The acquisition of Xueda Education Group (ADR) (NYSE:XUE) also represents a spree of acquisition by Tsinghua Unigroup, the state-owned corporation having also shown interest to acquire Micron Technology.  The deal if approved will be the biggest takeover by a Chinese company. However, there are concerns that the US government may block the deal ultimately

The $350 million takeover deal for Xueda Education Group (ADR) (NYSE:XUE) is relatively small taking into consideration the proposed $9 billion buyouts of Chinese internet provider Qihoo 360 Technology.  Tsinghua is also believed to have tabled a $2 billion bid for Chinese data center 21Vianet Group Inc.