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Thursday, December 2, 2021

Is This Why The RISE Education (REDU) Stock Rose Pre-Hours?

Last check, RISE Education Cayman Ltd (REDU) shares were gaining 14.29% to trade at $1.44 in pre-market. To close Tuesday’s session at $1.26, REDU’s stock fell -15.44%. Within the past 50 days, REDU stock traded 28.84 million shares, a higher volume than the average daily volume of 2.11 million shares. Over the last 12 months, shares of REDU have fallen by -78.53% and over the past week, they have risen by 76.97%.


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Stock price gains over the past three months are 8.62%, while stock price losses over the past six months are -63.48%. The current market cap of the company is $61.40 million, while its outstanding shares are 56.48 million. In the aftermath of the firm’s executives trying to acquire it, REDU stock has been gaining pre-hours.

Who is interested in purchasing REDU?

RISE Education is main instruction specialist organization that spotlights on the improvement of intellectual and inclination preparing for small kids worked with by an incorporated Online-Merge-Offline (OMO) showing approach model. Since its foundation in 2007, REDU has zeroed in on building an all-encompassing training framework that assists youngsters with growing balanced abilities and develop their gifts with vision, inspiration and advancement. REDU’s central goal is to make an inclination schooling environment that has some expertise in early kid improvement, intellectual reasoning, and fitness preparing.  

RISE Education today reported that its board has gotten a preliminary non-binding proposal letter dated October 18, 2021, from Ms. Lihong Wang, chairwoman of the Board and CEO of the Company to obtain a few interests in REDU.

  • Bidder is intrigued to obtain all of the value interests in Rise (Tianjin) Education Information Consulting Co., Ltd (“WFOE”) in a roundabout way held by REDU, and Beijing Step Ahead Education Technology Development Co., Ltd., a variable interest element constrained by REDU and WFOE (“VIE”).
  • The chief is likewise keen on gaining every one of the intellectual properties utilized in the lead of business of WFOE and VIE and possessed by Rise Education International Limited, an entirely claimed backhanded auxiliary of REDU.
  • That addresses considerably all resources of REDU, by and large the “Target”. The price tag for the Target is determined dependent on the all out big business worth of the Target which is viably comparable to existing liabilities and commitments of the Target (counting prepaid educational expenses yet barring obligation brought about under that specific seaward advance office understanding among the Company, CTBC Bank Co., Ltd. furthermore, different gatherings thereto (the “CTBC Facility”)).
  • The value worth of the Target and the price tag that will really be gotten by REDU in the exchange considered by the Proposal Letter will be zero. The Proposed Transaction will be dependent upon the assent by the moneylenders under the CTBC Facility.

How REDU has been reacting the deal?

The Board of RISE Education (REDU), with Ms. Wang recused, started to painstakingly assess the Proposal Letter and the Proposed Transaction. REDU Board has connected with China Renaissance Securities (Hong Kong) Limited as its monetary counsel. In this cycle, the Board will work with its legitimate and monetary guides to assess the Proposed Transaction and investigate some other options accessible to REDU that would be to the greatest advantage of the Company and its shareholders.

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