UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13E-3
(Amendment No. 3)
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)

 

ChinaEdu Corporation

(Name of Issuer)

 

ChinaEdu Corporation
ChinaEdu Holdings Limited
ChinaEdu Merger Sub Limited
Shawn Ding
Moral Known Industrial Limited
Julia Huang
South Lead Technology Limited
Gegeng Tana
Mei Yixin
Pan Zhixin
Ellen Huang
InterVision Technology Ltd.
MLP Holdings Limited
New Value Technology Limited
Lingyuan Furong Investment Mgmt Co., Ltd.
McGraw-Hill Global Education Intermediate Holdings, LLC
Weblearning Company Limited
Guo Young

(Name of Persons Filing Statement)

Ordinary Shares, par value $0.01 per share
American Depositary Shares, each representing 3 Ordinary Shares

(Title of Class of Securities)

16945L107⁽¹⁾

(CUSIP Number of Class of Securities)

 

Mei Yixin, Chief Financial Officer
ChinaEdu Corporation
4^th Floor-A, GeHua Building
No. 1 Qinglong Hutong, Dongcheng District
Beijing, 100007
The People’s Republic of China
+86 10 84186655
Facsimile: +86 10 84187331

(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)

 

with copies to:

Loeb & Loeb LLP Suite 4301, Tower C, Beijing Yintai Center 2 Jianguomenwai Daije, Chaoyang District Beijing 100022, P.R. China Attention: Roger Peng Facsimile: +86 10 5954 3501		Ropes & Gray LLP 41st Floor, One Exchange Square 8 Connaught Place Central, Hong Kong Attention: Paul W. Boltz, Jr. Facsimile: +852 3664 6588

 

This statement is filed in connection with (check the appropriate box):

Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: o

Check the following box if the filing is a final amendment reporting the results of the transaction: o

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CALCULATION OF FILING FEE

TRANSACTION VALUATION*		AMOUNT OF FILING FEE**
$30,327,296.31		$	3,906.16

Amount Previously Paid: 3,883.43		Filing Party: ChinaEdu
Form or Registration No.: 005-83714		Date Filed: 1/10/14

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		Page
ITEM 1. Summary of Term Sheet			3
ITEM 2. Subject Company Information			3
ITEM 3. Identity and Background of Filing Persons			3
ITEM 4. Terms of the Transaction			4
ITEM 5. Past Contracts, Transactions, Negotiations and Agreements			4
ITEM 6. Purposes of the Transaction and Plans or Proposals			5
ITEM 7. Purposes, Alternatives, Reasons and Effects			6
ITEM 8. Fairness of the Transaction			7
ITEM 9. Reports, Opinions, Appraisals and Negotiations			8
ITEM 10. Source and Amount of Funds or Other Consideration			9
ITEM 11. Interest in Securities of the Subject Company			9
ITEM 12. The Solicitation or Recommendation			9
ITEM 13. Financial Statements			10
ITEM 14. Persons/Assets, Retained, Employed, Compensated or Used			10
ITEM 15. Additional Information			10
ITEM 16. Exhibits			11

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INTRODUCTORY STATEMENT

This Amendment No.3 (the “Amendment”) to the Rule 13E-3 transaction statement on Schedule 13E-3, together with the exhibits thereto (the “Transaction Statement”), is being filed with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), jointly by the following persons (each, a “Filing Person”, and collectively, the “Filing Persons”): (a) ChinaEdu Corporation, a Cayman Islands company (the “Company”), the issuer of the ordinary shares, par value $0.01 per share (each, a “Share” and collectively, the “Shares”), including the Shares represented by the American depositary shares (“ADSs”), each representing 3 Shares, that is subject to the transaction pursuant to Rule 13e-3 under the Exchange Act; (b) ChinaEdu Holdings Limited (“Holdings”), an exempted company with limited liability incorporated in the Cayman Islands; (c) ChinaEdu Merger Sub Limited (“Merger Sub”), an exempted company with limited liability incorporated in the Cayman Islands; (d) Shawn Ding, the chief executive officer and a director of the Company; (e) Moral Known Industrial Limited, a business company incorporated in the British Virgin Islands; (f) Julia Huang, the executive chairman of the board of directors of the Company; (g) South Lead Technology Limited, a business company incorporated in the British Virgin Islands; (h) Gegeng Tana; (i) Mei Yixin; (j) Pan Zhixin; (k) Ellen Huang; (l) InterVision Technology Ltd., a business company incorporated in the British Virgin Islands; (m) MLP Holdings Limited; (n) New Value Technology Limited, a business company incorporated in the British Virgin Islands; (o) Lingyuan Furong Investment Mgmt Co., Ltd., a business company incorporated in the British Virgin Islands; (p) McGraw-Hill Global Education Intermediate Holdings, LLC, a Delaware limited liability company; (q) Weblearning Company Limited, a business company incorporated in the British Virgin Islands; and (r) Guo Young.

This Amendment relates to the agreement and plan of merger dated as of December 31, 2013 (the “Merger Agreement”), by and among the Company, Holdings and Merger Sub, providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation after the Merger as a wholly-owned subsidiary of Holdings, and the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Appendix 1 to the Merger Agreement (the “Cayman Plan of Merger”).

If the Merger Agreement and the Cayman Plan of Merger are approved and authorized by the requisite vote of the Company’s shareholders and the Merger is completed, each Share issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into and exchanged for the right to receive $2.33 and each ADS, each representing 3 Shares, will represent the right to receive $7.00, in each case, in cash, without interest and net of any applicable withholding taxes. The following Shares (including Shares represented by ADSs) will not be converted into the right to receive the consideration described in the immediately preceding sentence: (a) Shares owned immediately prior to the effective time of the Merger by Shawn Ding, Moral Known Industrial Limited, Julia Huang, South Lead Technology Limited, Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited, Lingyuan Furong Investment Mgmt Co., Ltd., McGraw-Hill Global Education Intermediate Holdings, LLC, Weblearning Company Limited and Guo Young (the “Rollover Shareholders”), which are subject to a contribution agreement whereby such shareholders have agreed to contribute such Shares (except, in the case of McGraw-Hill Global Education Intermediate Holdings, LLC, limited to 3,377,336 Shares held by it) (the “Rollover Shares”) to Holdings, which contributed Rollover Shares will, in accordance with the contribution agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings, (b) Shares and ADSs beneficially owned immediately prior to the effective time of the Merger by the Company as treasury shares, held in brokerage accounts in the Company’s name, or issued to The Bank of New York (the “ADS Depositary”) and reserved for future grants under the Company’s 2010 Equity Incentive Plan (the “Company Plan”) (collectively with the Rollover Shares, the “Excluded Shares”), and (c) Shares owned by shareholders who have validly exercised and perfected and not effectively withdrawn or lost their dissenter rights pursuant to Section 238 of the Cayman Companies Law, as amended, which will be cancelled and will entitle the former holders thereof to receive the fair value of such Shares as determined in accordance with such holder’s dissenter rights under the Cayman Companies Law (the “Dissenting Shares”).

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At the effective time of the Merger, each option to purchase Shares (each, a “Company Option”) granted pursuant to the Company Plan that is then outstanding and unexercised, whether or not vested, shall be cancelled and converted into and exchanged for an option to acquire one fully paid and non-assessable ordinary share, par value $0.001 per share, of Holdings (each, a “Holdings Option”). Each Holdings Option shall have an exercise or purchase price equal to the exercise or purchase price of the corresponding Company Option. Each Holdings Option shall otherwise retain the same grant date, the same vesting or exercise schedule, the same term and expiration date and substantially the same other material terms and conditions as each Company Option.

At the effective time of the Merger, each restricted stock unit granted pursuant to the Company Plan (each, a “Company RSU”) shall be cancelled and converted into and exchanged for a restricted stock unit of Holdings (each, a “Holdings RSU”). Each Holdings RSU shall be subject to the same material terms and conditions as each Company RSU.

The Merger remains subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, including obtaining the requisite approval of (i) shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting, and (ii) shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the extraordinary general meeting.

The Company will make available to its shareholders a proxy statement (the “Proxy Statement,” a copy of which is attached as Exhibit (a)(1) hereto), relating to the extraordinary general meeting of shareholders of the Company, at which the shareholders of the Company will consider and vote upon, among other proposals, a proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger.

The cross-references below are being supplied pursuant to General Instruction G to Schedule 13E-3 and show the location in the Proxy Statement (or such other document incorporated herein by reference) of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the Proxy Statement, including all annexes thereto, is incorporated in its entirety herein by this reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy Statement and the annexes thereto. Capitalized terms used but not defined in this Schedule 13E-3 shall have the meanings given to them in the Proxy Statement.

All information contained in this filing concerning each Filing Person has been supplied by such Filing Person.

The filing of this Amendment shall not be construed as an admission by any of the Filing Persons or by any affiliate of a Filing Person, that the Company is “controlled” by any other Filing Person or that any Filing Person is an “affiliate” of the Company within the meaning of Rule 13e-3 under Section 13(e) of the Exchange Act.

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ITEM 1. Summary of Term Sheet

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

ITEM 2. Subject Company Information

(a) Name and Address.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(b) Securities.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Trading Market and Price.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(d) Dividends.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(e) Prior Public Offerings.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(f) Prior Stock Purchases.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

ITEM 3. Identity and Background of Filing Persons

(a) Name and Address.   ChinaEdu Corporation is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Business and Background of Entities.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Business and Background of Natural Persons.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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ITEM 4. Terms of the Transaction

(a)-(1) Material Terms — Tender Offers.  Not applicable.

(a)-(2) Material Terms — Merger or Similar Transactions.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Different Terms.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(d) Appraisal Rights.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(e) Provisions for Unaffiliated Security Holders.  There are no provisions in connection with the Merger to grant unaffiliated security holders access to the corporate files of the Filing Persons or to obtain counsel or appraisal services at the expense of the Filing Persons.

(f) Eligibility of Listing or Trading.  Not applicable.

ITEM 5. Past Contracts, Transactions, Negotiations and Agreements

(a) Transactions.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Significant Corporate Events.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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(c) Negotiations or Contacts.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(e) Agreements Involving the Subject Company’s Securities.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

ITEM 6. Purposes of the Transaction and Plans or Proposals

(b) Use of Securities Acquired.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c)(1) – (8) Plans.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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ITEM 7. Purposes, Alternatives, Reasons and Effects

(a) Purposes.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Alternatives.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Reasons.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(d) Effects.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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ITEM 8. Fairness of the Transaction

(a) – (b) Fairness; Factors Considered in Determining Fairness.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Approval of Security Holders.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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(d) Unaffiliated Representative.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(e) Approval of Directors.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(f) Other Offers.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

ITEM 9. Reports, Opinions, Appraisals and Negotiations

(a) Report, Opinion or Appraisal.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Preparer and Summary of the Report, Opinion or Appraisal.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Availability of Documents.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

The reports, opinions or appraisals referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of the Company during its regular business hours by any interested holder of the Shares and ADSs or his, her or its representative who has been so designated in writing.

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ITEM 10. Source and Amount of Funds or Other Consideration

(a) Source of Funds.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Conditions.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(c) Expenses.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(d) Borrowed Funds.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

ITEM 11. Interest in Securities of the Subject Company

(a) Securities Ownership.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Securities Transactions.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

ITEM 12. The Solicitation or Recommendation

(d) Intent to Tender or Vote in a Going-Private Transaction.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(e) Recommendations of Others.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

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ITEM 13. Financial Statements

(a) Financial Information.  The audited financial statements of the Company for the two years ended December 31, 2011 and 2012 were included in the Company’s Form 20-F for the year ended December 31, 2012, which were filed with the SEC on April 25, 2013 and are incorporated herein by reference.

The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

(b) Pro Forma Information.  Not applicable.

ITEM 14. Persons/Assets, Retained, Employed, Compensated or Used

(a) Solicitation or Recommendations.  The information set forth in the Proxy Statement under the following caption is incorporated herein by reference:

(b) Employees and Corporate Assets.  The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:

ITEM 15. Additional Information

(b) Other Material Information.  The information contained in the Proxy Statement, including all annexes thereto, is incorporated herein by reference.

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ITEM 16. Exhibits

(a)-(1)		Proxy Statement of the Company dated March 17, 2014 (the “Proxy Statement”).
(a)-(2)		Notice of Extraordinary General Meeting of Shareholders of the Company, incorporated herein by reference to the Proxy Statement.
(a)-(3)		Proxy Card, incorporated herein by reference to the Proxy Statement.
(a)-(4)		ADS Voting Instruction Card, incorporated herein by reference to the Proxy Statement.
(a)-(5)		Press Release issued by the Company, dated December 31, 2013, incorporated herein by reference to Exhibit 99.1 to the Report on Form 6-K furnished by the Company to the SEC on December 31, 2013.
(b)-(1)		Voting Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.6 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(2)		Contribution Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.7 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(3)		USD30,000,000 Facility Agreement (Holdco), dated December 24, 2013, incorporated herein by reference to Exhibit 99.8 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(4)		Consortium Agreement, dated August 16, 2013, incorporated herein by reference to Exhibit 3 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on August 20, 2013.
(b)-(5)		First Amendment to Consortium Agreement, dated December 5, 2013, incorporated herein by reference to Exhibit 4 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on December 6, 2013.
(b)-(6)		Shareholders Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.9 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(c)-(1)		Opinion of Houlihan Lokey (China) Limited, dated December 30, 2013, incorporated herein by reference to Annex B to the Proxy Statement.
(c)-(2)		Discussion Materials prepared by Houlihan Lokey (China) Limited for discussion with the independent committee of the board of directors of the Company, dated December 30, 2013.
(d)-(1)		Agreement and Plan of Merger dated as December 31, 2013, by and among the Company, Holdings and Merger Sub incorporated herein by reference to Annex A-1 to the Proxy Statement.
(f)-(1)		Dissenters’ Rights, incorporated herein by reference to the section entitled “Dissenters’ Rights” in the Proxy Statement.
(f)-(2)		Section 238 of the Cayman Islands Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised), incorporated herein by reference to Annex C to the Proxy Statement.
(g)		Not applicable.

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SIGNATURE

After due inquiry and to the best of my knowledge and belief, the undersigned hereby certify that the information set forth in this statement is true, complete and correct.

Dated: March 17, 2014

ChinaEdu Corporation   By:

/s/ Samuel Yen Name: Samuel Yen Title: Chairman of the Independent Committee

ChinaEdu Holdings Limited   By:

/s/ Shawn Ding Name: Shawn Ding Title: Director

By:

/s/ Julia Huang Name: Julia Huang Title: Director

ChinaEdu Merger Sub Limited   By:

/s/ Shawn Ding Name: Shawn Ding Title: Director

By:

/s/ Julia Huang Name: Julia Huang Title: Director

Shawn Ding

/s/ Shawn Ding

Shawn Ding

Moral Known Industrial Limited   By:

/s/ Shawn Ding Name: Shawn Ding Title: Director

Julia Huang

/s/ Julia Huang

Julia Huang

South Lead Technology Limited   By:

/s/ Julia Huang Name: Julia Huang Title: Director

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Gegeng Tana

/s/ Gegeng Tana

Gegeng Tana

Mei Yixin

/s/ Mei Yixin

Mei Yixin

Pan Zhixin

/s/ Pan Zhixin

Pan Zhixin

Ellen Huang

/s/ Ellen Huang

Ellen Huang

InterVision Technology Ltd.   By:

/s/ Roger Peng Name: Roger Peng Title: Director

MLP Holdings Limited   By:

/s/ Roger Peng Name: Roger Peng Title: Director

New Value Technology Limited   By:

/s/ Lucy Li Name: Lucy Li Title: Director

Lingyuan Furong Investment Mgmt Co., Ltd.   By:

/s/ Wang Fu Shyi Name: Wang Fu Shyi Title: Director

McGraw-Hill Global Education Intermediate Holdings, LLC   By:

/s/ David Stafford Name: David Stafford Title: Senior Vice President and      General Counsel

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Weblearning Company Limited   By:

/s/ Wang Fu Shyi Name: Wang Fu Shyi Title: Director

Guo Young

/s/ Guo Young

Guo Young

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EXHIBIT INDEX

(a)-(1)		Proxy Statement of the Company dated March 17, 2014 (the “Proxy Statement”).
(a)-(2)		Notice of Extraordinary General Meeting of Shareholders of the Company, incorporated herein by reference to the Proxy Statement.
(a)-(3)		Proxy Card, incorporated herein by reference to the Proxy Statement.
(a)-(4)		ADS Voting Instruction Card, incorporated herein by reference to the Proxy Statement.
(a)-(5)		Press Release issued by the Company, dated December 31, 2013, incorporated herein by reference to Exhibit 99.1 to the Report on Form 6-K furnished by the Company to the SEC on December 31, 2013.
(b)-(1)		Voting Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.6 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(2)		Contribution Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.7 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(3)		USD30,000,000 Facility Agreement (Holdco), dated December 24, 2013, incorporated herein by reference to Exhibit 99.8 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(b)-(4)		Consortium Agreement, dated August 16, 2013, incorporated herein by reference to Exhibit 3 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on August 20, 2013.
(b)-(5)		First Amendment to Consortium Agreement, dated December 5, 2013, incorporated herein by reference to Exhibit 4 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on December 6, 2013.
(b)-(6)		Shareholders Agreement, dated December 31, 2013, incorporated herein by reference to Exhibit 99.9 to Schedule 13D/A filed by Shawn Ding and Moral Known Industrial Limited on January 2, 2014.
(c)-(1)		Opinion of Houlihan Lokey (China) Limited, dated December 30, 2013, incorporated herein by reference to Annex B to the Proxy Statement.
(c)-(2)		Discussion Materials prepared by Houlihan Lokey (China) Limited for discussion with the independent committee of the board of directors of the Company, dated December 30, 2013.
(d)-(1)		Agreement and Plan of Merger dated as December 31, 2013, by and among the Company, Holdings and Merger Sub incorporated herein by reference to Annex A-1 to the Proxy Statement.
(f)-(1)		Dissenters’ Rights, incorporated herein by reference to the section entitled “Dissenters’ Rights” in the Proxy Statement.
(f)-(2)		Section 238 of the Cayman Islands Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised), incorporated herein by reference to Annex C to the Proxy Statement.
(g)		Not applicable.

Exhibit (a)(1)

March 17, 2014
 
Shareholders of ChinaEdu Corporation
 
Re: Notice of Extraordinary General Meeting of Shareholders
 Dear Shareholder:

You are cordially invited to attend an extraordinary general meeting of shareholders of ChinaEdu Corporation (the “Company”) to be held on April 18, 2014, at 2:00 p.m. (Beijing time), at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China. The attached notice of the extraordinary general meeting and proxy statement provide information regarding the matters to be considered and voted on at the extraordinary general meeting, including at any adjournment or postponement thereof. We hope that you can attend.

On December 31, 2013, we entered into an agreement and plan of merger (the “Merger Agreement”) with ChinaEdu Holdings Limited (“Holdings”) and ChinaEdu Merger Sub Limited (“Merger Sub”) pursuant to which Merger Sub will be merged with and into the Company (the “Merger”) and cease to exist, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Holdings. The purpose of the extraordinary general meeting is for you and the other shareholders of the Company to consider and vote upon a proposal to approve and authorize the Merger Agreement and the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Appendix 1 to the Merger Agreement (the “Cayman Plan of Merger”) and the transactions contemplated thereby, including the Merger. A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement. A copy of the Cayman Plan of Merger is attached as Annex A-2 to the accompanying proxy statement.

If the Merger Agreement and the Cayman Plan of Merger are approved and authorized by the requisite vote of the Company’s shareholders and the Merger is completed, each ordinary share of the Company, par value $0.01 per share (“Share”) issued and outstanding immediately prior to the effective time of the Merger will be cancelled and cease to exist and will be converted into and exchanged for the right to receive $2.33 and each of the Company’s American depositary shares (“ADSs”), each representing three Shares, will be cancelled in exchange for the right to receive $7.00, in each case, in cash, without interest and net of any applicable withholding taxes. The following Shares of the Company (including Shares represented by ADSs) will not be converted into the right to receive the consideration described in the immediately preceding sentence: (a) Shares owned immediately prior to the effective time of the Merger by Shawn Ding, Moral Known Industrial Limited, Julia Huang, South Lead Technology Limited, Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited, Lingyuan Furong Investment Mgmt Co., Ltd., McGraw-Hill Global Education Intermediate Holdings, LLC, Weblearning Company Limited and Guo Young (the “Rollover Shareholders”), which are subject to a contribution agreement dated December 31, 2013 (the “Contribution Agreement”) whereby such shareholders have agreed to contribute such Shares (except, in the case of McGraw-Hill Global Education Intermediate Holdings, LLC, limited to 3,377,336 Shares held by it) (the “Rollover Shares”) to Holdings, which contributed Rollover Shares will in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings and will be cancelled and cease to exist at the effective time of the Merger, (b) Shares and ADSs beneficially owned immediately prior to the effective time of the Merger by the Company as treasury shares, held in brokerage accounts in the Company’s name, or issued to The Bank of New York (the “ADS Depositary”) and reserved for future grants under the Company’s 2010 Equity Incentive Plan (the “Company Plan”), which will, by virtue of the Merger and without any action on the part of their holders, cease to be outstanding and will be cancelled and cease to exist without payment of any consideration or distribution therefor, and (c) the Shares owned by shareholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the Merger pursuant to Section 238 of the Companies Law, as amended, of the Cayman Islands (the “Cayman

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Companies Law”), which will be cancelled and will entitle the former holders thereof to receive the fair value of such Shares as determined in accordance with such holder’s dissenters’ rights under the Cayman Companies Law.

At the effective time of the Merger, each option to purchase Shares (each, a “Company Option”) granted pursuant to the Company Plan that is then outstanding and unexercised, whether or not vested, shall be cancelled and converted into and exchanged for an option to acquire one fully paid and non-assessable ordinary share, par value $0.001 per share, of Holdings (each, a “Holdings Option”). Each Holdings Option shall have an exercise or purchase price equal to the exercise or purchase price of the corresponding Company Option. Each Holdings Option shall otherwise retain the same grant date, the same vesting or exercise schedule, the same term and expiration date and substantially the same other material terms and conditions as each Company Option.

At the effective time of the Merger, each restricted stock unit granted pursuant to the Company Plan (each, a “Company RSU”) shall be cancelled and converted into and exchanged for a restricted stock unit of Holdings (each, a “Holdings RSU”). Each Holdings RSU shall be subject to the same terms and conditions as each Company RSU.

An independent committee of the board of directors of the Company, composed solely of directors of the Company who are unaffiliated with any Rollover Shareholder or any of the management members of the Company (the “Independent Committee”), reviewed and considered the terms and conditions of the Merger Agreement, the Cayman Plan of Merger, the Contribution Agreement and a voting agreement, dated December 31, 2013, entered into among the Company, Holdings and the Rollover Shareholders party thereto (the “Voting Agreement”, and together with the Merger Agreement, the Cayman Plan of Merger and the Contribution Agreement, the “Transaction Documents”) and the transactions contemplated thereby, including the Merger. The Independent Committee unanimously (a) determined that the Transaction Documents, the Merger, and the transactions contemplated thereby are advisable and in the best interest of the Company and its shareholders, as a general body and of the Company as a whole, (b) determined that the Merger and the Merger consideration is fair and reasonable, and (c) recommended that the board of directors of the Company approve the Transaction Documents, in the form presented to the Independent Committee, the Merger and other transactions contemplated by the Transaction Documents, the same being fair and reasonable to, advisable and in the best interests of the Company and its shareholders, in accordance with Cayman Islands laws.

On December 30, 2013, our board of directors, after carefully considering all relevant factors, including the unanimous determination and recommendation of the Independent Committee, (a) determined that the Merger, on the terms and subject to the conditions set forth in the Merger Agreement, is substantively and procedurally fair to, and in the best interests of, the Company and its unaffiliated shareholders and ADS holders, and declared it advisable to enter into the Merger Agreement and the Cayman Plan of Merger, (b) approved the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, and (c) recommended that the Company’s shareholders vote FOR the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger.

The Company’s board of directors recommend that you vote FOR the proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

In considering the recommendation of the Independent Committee and the board of directors, you should be aware that some of the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally. Mr. Shawn Ding, the chief executive officer and a director of the Company, along with his affiliated entities, beneficially own

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approximately 10.4% of the total number of outstanding Shares as of the date of this proxy statement. Mrs. Julia Huang, the executive chairman of the board of directors of the Company, along with her affiliated entities, beneficially own approximately 8.4% of the total number of outstanding Shares as of the date of this proxy statement. The Rollover Shareholders have agreed with Holdings to contribute to Holdings the Rollover Shares pursuant to the Contribution Agreement, which contributed Shares will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings. The Rollover Shareholders, as a group, beneficially own 18,500,961 Shares, which represent approximately 61.6% of the total number of outstanding Shares of the Company, including 4,375,160 Shares underlying Company Options and Company RSUs held by the Rollover Shareholders exercisable within sixty days of the date of the accompanying proxy statement.

The accompanying proxy statement includes detailed information about the Merger and the extraordinary general meeting (including additional information regarding certain interests of the Company’s directors and executive officers that may be different from, or in addition to, the interests of our shareholders generally). We encourage you to read the entire document and all of the attachments and other documents referred to or incorporated by reference herein carefully. You may also obtain more information about the Company from documents the Company has filed with the Securities and Exchange Commission (“SEC ”), which are available for free at the SEC’s website www.sec.gov.  

Regardless of the number of Shares you own, your vote is very important. The Merger cannot be completed unless the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, are approved and authorized by an affirmative vote of (i) shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting, and (ii) shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the extraordinary general meeting. As of the date of this letter, the Rollover Shareholders, as a group, beneficially own approximately 61.4% of the total number of outstanding Shares of the Company, including 4,375,160 Shares underlying Company Options and Company RSUs exercisable within 60 days as of the date of the accompanying proxy statement. Pursuant to the terms of the Merger Agreement and the Voting Agreement, 14,125,801 of these Shares, representing 54.9% of the total outstanding Shares of the Company, will be voted in favor of the approval and authorization of the Merger Agreement, the Cayman Plan of Merger and the Merger at the extraordinary general meeting.

Whether or not you plan to attend the extraordinary general meeting, please complete the accompanying proxy card in accordance with the instructions set forth on the proxy card, as promptly as possible. The deadline to lodge your proxy card is April 17, 2014 at 5:00 p.m. (Beijing time). Voting by proxy will not prevent you from voting in person if you choose to attend the extraordinary general meeting, but will ensure that your vote will be counted if you are unable to attend. Voting at the extraordinary general meeting will take place by poll voting as the chairman of the Company’s board of directors has undertaken to demand poll voting at the meeting. Each shareholder will have one vote for each Share held as of the close of business in the Cayman Islands on March 31, 2014.

If you own ADSs as at the close of business in New York City on March 17, 2014, the ADS record date, you may instruct the ADS Depositary, as the holder of the Shares underlying the ADSs, how to vote the Shares underlying your ADSs. However, you cannot vote at the extraordinary general meeting directly. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to vote the Shares underlying your ADSs at the extraordinary general meeting. The ADS Depositary will not vote or attempt to exercise the right to vote the Shares underlying your ADSs other than in accordance with those instructions.

If you hold your Shares or ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your Shares or ADSs if you wish to vote (or have the Shares underlying your ADSs be voted) at the extraordinary general meeting.

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Neither the SEC nor any state securities regulatory agency has approved or disapproved the Merger, passed upon the merits or fairness of the Merger or passed upon the adequacy or accuracy of the disclosure in this letter or in the accompanying notice of the extraordinary general meeting or proxy statement. Any representation to the contrary is a criminal offense.

If you have any questions or need assistance in voting your Shares or ADSs, you can contact the Company by calling +86 10 8418 6655 or mailing to ChinaEdu Corporation at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China.

On behalf of ChinaEdu Corporation, we would like to thank all of our shareholders for their ongoing support as we prepare to take part in this important event in our history.

Sincerely, /s/ Samuel Yen Mr. Samuel Yen Chairman of the Independent Committee				Sincerely, /s/ Shawn Ding Mr. Shawn Ding Chief Executive Officer

The accompanying proxy statement is dated March 17, 2014 and is first being mailed to shareholders on or about March 20, 2014.

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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 2014

Dear Shareholder:

Notice is hereby given that an extraordinary general meeting (the “EGM”) of the shareholders of ChinaEdu Corporation, referred to herein alternately as the “Company,” “us,” or “we” and all terms correlative thereto, will be held on April 18, 2014, beginning at 2:00 p.m.. (Beijing time), at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, The People’s Republic of China.

Only holders of ordinary shares of the Company, par value $0.01 per share (“Shares”), of record on the close of business in the Cayman Islands on March 31, 2014 or their proxy holders are entitled to vote at the EGM or any adjournment or postponements thereof. At the meeting, you will be asked to consider and vote upon the following resolutions:

1. as a special resolution:

THAT the agreement and plan of merger dated December 31, 2013 (the “Merger Agreement”) by and among ChinaEdu Holdings Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Holdings”), ChinaEdu Merger Sub Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands and a direct wholly-owned subsidiary of Holdings (“Merger Sub”) and the Company, and the plan of merger required to be filed with the Registrar of Companies of the Cayman Islands, substantially in the form attached as Appendix 1 to the Merger Agreement (the “Cayman Plan of Merger”) (a copy of such Merger Agreement and Cayman Plan of Merger being in the form attached as Annexes A-1 and A-2 respectively to the proxy statement accompanying this notice of the extraordinary general meeting, which will also be produced and made available for inspection at the extraordinary general meeting), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”) and cease to exist, with the Company continuing as the surviving corporation, and the transactions contemplated thereby, including the Merger, be authorized, approved and adopted by the Company.

2. as an ordinary resolution:

THAT the directors and officers of the Company be and are hereby authorized to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger; and

THAT, the chairman of the extraordinary general meeting be instructed to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

In addition to being proposed and voted on as a special resolution, the resolutions set out in paragraph 1 above will also be proposed to and voted on by all shareholders other than the Rollover Shareholders (as defined in the Merger Agreement) present and voting in person or by proxy as a single class at the EGM. It is a requirement of the Merger Agreement that the Merger cannot be completed unless such resolution is approved by shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the EGM.

Please refer to the proxy statement, which is attached to and made a part of this notice. A list of the shareholders of the Company will be available at its principal executive offices at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China, during ordinary business hours for ten business days immediately prior to the extraordinary general meeting.

After careful consideration and upon the unanimous recommendation of an independent committee of the board of directors of the Company, composed solely of directors of the Company who are unaffiliated with Holdings, Merger Sub (or any of their affiliates) or any of the management members of the Company, the Company’s board of directors approved the Merger Agreement and recommends that you vote FOR the proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the

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Company to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the EGM in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the EGM to pass the special resolutions to be proposed at the EGM.

Regardless of the number of Shares that you own, your vote is very important. The Merger cannot be completed unless the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, are approved and authorized by an affirmative vote of (i) shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the EGM, and (ii) shareholders (other than the buyer group) representing a majority of the outstanding Shares (excluding the Shares held by the buyer group) present and voting in person or by proxy as a single class at the EGM.

Even if you plan to attend the EGM in person, we request that you submit your proxy in accordance with the instructions set forth on the proxy card as promptly as possible. To be valid, this proxy card must be completed, signed and returned to the Company’s offices (to the attention of: Mr. Mei Yixin) at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China no later than April 17, 2014 at 5:00 p.m. (Beijing time). The proxy card is the “instrument of proxy” as referred to in the Company’s articles of association. Voting at the EGM will take place by poll voting as the chairman of the Company’s board of directors has undertaken to demand poll voting at the EGM. Each shareholder has one vote for each Share held as of the close of business in the Cayman Islands on March 31, 2014. If you receive more than one proxy card because you own Shares that are registered in different names, please vote all of your Shares shown on each of your proxy cards in accordance with the instructions set forth on the proxy card.

Completing the proxy card in accordance with the instructions set forth on the proxy card will not deprive you of your right to attend the EGM and vote your Shares in person. Please note, however, that if your Shares are held of record by a broker, bank or nominee and you wish to vote at the EGM in person, you must obtain from the record holder a proxy issued in your name.

If you fail to complete your proxy card in accordance with the instructions set forth on the proxy card or if you abstain from voting, your vote will not be counted. If you submit your proxy card without indicating how you wish to vote, the Shares represented by your proxy card will be voted FOR the proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the EGM in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the EGM to pass the special resolutions to be proposed at the EGM unless you appoint a person other than the chairman of the meeting as proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

If you own American depositary shares of the Company, each representing 3 Shares (“ADSs”), as at the close of business in New York City on March 17, 2014, the ADS record date, you may instruct The Bank of New York (the “ADS Depositary”), in its capacity as depositary of the ADSs (and as the holder of the Shares underlying the ADSs), how to vote the Shares underlying your ADSs. However, you cannot attend and vote at the extraordinary general meeting directly. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to vote the underlying Shares at the EGM. The ADS Depositary has advised us that it will not vote or attempt to exercise the right to vote Shares represented by ADSs other than in accordance with properly executed voting instruction cards. Alternatively, you may attend and vote directly at the EGM if you surrender your ADSs to the ADS Depositary, pay the ADS Depositary’s fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that you have not given, and will not give, voting instructions as to the ADSs before the close of business in New York City on March 26, 2014, and become a holder of Shares by the close of business in the Cayman Islands on March 31, 2014, the Share record date. In addition, if you

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hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the EGM.

Shareholders who dissent from the Merger will have the right to receive payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is taken at the EGM, a written objection to the Merger and subsequently comply with all procedures and requirements of Section 238 of the Companies Law, as amended, of the Cayman Islands (the “Cayman Companies Law”) for the exercise of dissenters’ rights. A copy of section 238 of the Cayman Companies Law is attached as Annex C to the accompanying proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration which such dissenting shareholders would otherwise have received pursuant to the Merger Agreement if they had not exercised dissenters’ rights with respect to their Shares.

ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTERS’ RIGHTS AND TO RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS’ RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS’ RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY’S FEES REQUIRED FOR SUCH SURRENDER, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON MARCH 26, 2014, AND BECOME HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON MARCH 31, 2014. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS’ RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW.

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PLEASE DO NOT SEND YOUR SHARE CERTIFICATES AT THIS TIME. IF THE MERGER IS COMPLETED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR SHARE CERTIFICATES.

If you have any questions or need assistance in voting your Shares or ADSs, you can contact the Company by calling +86 10 8418 6655 or mailing ChinaEdu Corporation at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China.

The Merger Agreement, Cayman Plan of Merger and the Merger are described in the accompanying proxy statement. A copy of the Merger Agreement is included as Annex A-1 to the accompanying proxy statement and a copy of the Cayman Plan of Merger is included as Annex A-2 to the accompanying proxy statement. We urge you to read the entire proxy statement carefully.

Notes:

BY ORDER OF THE BOARD OF DIRECTORS,

/s/ Shawn Ding

March 17, 2014

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PROXY STATEMENT

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SUMMARY VOTING INSTRUCTIONS

Ensure that your shares of ChinaEdu Corporation can be voted at the extraordinary general meeting by submitting your proxy or contacting your broker, dealer, commercial bank, trust company or other nominee.

If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee:  check the voting instruction card forwarded by your broker, dealer, commercial bank, trust company or other nominee to see which voting options are available or contact your broker, dealer, commercial bank, trust company or other nominee in order to obtain directions as to how to ensure that your shares are voted at the extraordinary general meeting.

If your shares are registered in your name:  submit your proxy as soon as possible by signing, dating and returning the enclosed proxy card in the enclosed postage-paid envelope, so that your shares can be voted at the extraordinary general meeting unless you appoint a person other than the chairman of the meeting as proxy, in which case the shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines.

If you submit your proxy card without indicating how you wish to vote, the shares represented by your proxy will be voted in favor of the resolutions to be proposed at the extraordinary general meeting.

If you have any questions, require assistance with voting your proxy card,
or need additional copies of proxy material, please call the Company at
+86 10 8418 6655.

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		Page
SUMMARY TERM SHEET			1
The Parties Involved in the Merger			1
The Merger			4
Merger Consideration			5
Treatment of Company Options and Company RSUs			6
Record Date and Voting			6
Shareholder Vote Required to Approve and Adopt the Merger Agreement and the Transactions Contemplated thereby, including the Merger			6
Voting Information			7
Dissenters’ Rights of Shareholders and ADS Holders			7
Purposes and Effects of the Merger			8
Plans for the Company after the Merger			8
Recommendation of the Independent Committee and Our Board of Directors			9
Position of the Buyer Group as to Fairness of the Merger			10
Financing of the Merger			10
Share Ownership of the Company Directors and Officers and Voting Commitments			10
Opinion of Financial Advisor to the Independent Committee			11
Interests of the Company’s Executive Officers and Directors in the Merger			11
Limitation on Solicitation and Considering Acquisition Proposals			12
No Change of Recommendation			13
Conditions to the Merger			13
Termination of the Merger Agreement			14
Material U.S. Federal Income Tax Consequences			15
Material PRC Income Tax Consequences			15
Material Cayman Islands Tax Consequences			15
Regulatory Matters			15
Accounting Treatment of the Merger			16
Market Price of the ADSs			16
QUESTIONS AND ANSWERS ABOUT THE EXTRAORDINARY GENERAL MEETING AND THE MERGER			17
SPECIAL FACTORS			26
Background of the Merger			26
Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors			40
Position of the Buyer Group as to the Fairness of the Merger			45
Certain Financial Projections			50
Opinion of Houlihan Lokey, the Independent Committee’s Financial Advisor			51
Purpose of and Reasons for the Merger			59
Effects of the Merger on the Company			60

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		Page
Plans for the Company after the Merger			62
Alternatives to the Merger			63
Effects on the Company if the Merger is not Completed			64
Financing			64
Interests of Certain Persons in the Merger			66
Related Party Transactions			68
Fees and Expenses			70
Voting by the Buyer Group at the Extraordinary General Meeting			70
Litigation Related to the Merger			70
Accounting Treatment of the Merger			70
Regulatory Matters			70
Material U.S. Federal Income Tax Consequences			71
Material PRC Income Tax Consequences			73
Material Cayman Islands Tax Consequences			74
MARKET PRICE OF THE ADSS, DIVIDENDS AND OTHER MATTERS			75
Market Price of the ADSs			75
Dividend Policy			75
THE EXTRAORDINARY GENERAL MEETING			76
Date, Time and Place of the Extraordinary General Meeting			76
Proposals to be Considered at the Extraordinary General Meeting			76
Our Board’s Recommendation			77
Record Date; Shares and ADSs Entitled to Vote			77
Quorum			77
Vote Required			77
Procedures for Voting			78
Voting of Proxies and Failure to Vote			79
Revocability of Proxies			79
Rights of Shareholders Who Object to the Merger			80
Whom to Call for Assistance			80
Solicitation of Proxies			80
Other Business			81
THE AGREEMENT AND PLAN OF MERGER			82
Structure and Completion of the Merger			82
Memorandum and Articles of Association; Directors and Officers of the Surviving Corporation			82
Merger Consideration			82
Treatment of Company Options and Company RSUs			83
Exchange Procedures			83
Representations and Warranties			84

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		Page
Conduct of Business Prior to Closing			87
Shareholders’ Meeting			89
No Solicitation of Company Acquisition Proposals and No Change of Recommendation			89
Indemnification; Directors’ and Officers’ Insurance			90
Financing and financing assistance			91
Other Covenants			92
Conditions to the Merger			93
Termination of the Merger Agreement			93
Fees and Expenses			94
Modification or Amendment; Waiver of Conditions			95
Remedies			95
DISSENTERS’ RIGHTS			95
Requirements for Exercising Dissenters’ Rights			95
FINANCIAL INFORMATION			98
Selected Historical Financial Information			98
Net Book Value per Share of Our Shares			100
TRANSACTIONS IN THE SHARES AND ADSs			101
Purchases by the Company			101
Purchases by Mr. Shawn Ding and Mrs. Julia Huang and Their Affiliates			101
Purchases by Other Members of Buyers’ Group			103
Prior Public Offerings			103
Transactions in Prior 60 Days			103
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMPANY			104
FUTURE SHAREHOLDER PROPOSALS			105
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			106
WHERE YOU CAN FIND MORE INFORMATION			107

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SUMMARY TERM SHEET

This “Summary Term Sheet,” together with the “Questions and Answers About the Extraordinary General Meeting and the Merger,” summarizes the material information contained in the proxy statement. However, it may not contain all of the information that may be important to your consideration of the proposed merger. You should carefully read this entire proxy statement and the other documents to which this proxy statement refers for a more complete understanding of the matters being considered at the extraordinary general meeting. In addition, this proxy statement incorporates by reference important business and financial information about the Company. You are encouraged to read all of the documents incorporated by reference into this proxy statement, and you may obtain such information without charge by following the instructions in “Where You Can Find More Information” beginning on page 107. In this proxy statement, unless otherwise indicated, the terms “we,” “us,” “our,” and the “Company” refer to ChinaEdu Corporation and its subsidiaries. All references to “dollars” and “$” in this proxy statement are to United States dollars.

The Parties Involved in the Merger

ChinaEdu Corporation

ChinaEdu Corporation, a Cayman Islands exempted company with limited liability (the “Company”) headquartered in Beijing, China, is a leading educational services provider in China. Our principal executive office is located at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China. The telephone number of the Company’s principle executive office is +86 10 8418 6655.

For a description of our history, development, business and organizational structure, see our Annual Report on Form 20-F for the year ended December 31, 2012, filed with the Securities and Exchange Commission (the “SEC”) on April 25, 2013, which is incorporated herein by reference. Please see “Where You Can Find More Information” beginning on page 107 for a description of how to obtain a copy of our Annual Report.

Holdings

ChinaEdu Holdings Limited (“Holdings”) is an exempted company with limited liability incorporated under the laws of the Cayman Islands. Holdings is a holding company formed solely for the purpose of holding the equity interest in Merger Sub (as defined below) and arranging and entering into the related investment transactions.

Pursuant to a contribution agreement, dated December 31, 2013 (the “Contribution Agreement”) by and among Shawn Ding, Moral Known Industrial Limited, Julia Huang, South Lead Technology Limited, Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited, Lingyuan Furong Investment Mgmt Co., Ltd., McGraw-Hill Global Education Intermediate Holdings, LLC, Weblearning Company Limited, and Guo Young (collectively, the “Rollover Shareholders”) and Holdings, the Rollover Shareholders will contribute the Shares owned by them immediately prior to the effective time of the Merger (defined below) to Holdings (except, in the case of McGraw-Hill Global Education Intermediate Holdings, LLC, limited to 3,377,336 Shares held by it) (the “Rollover Shares”) in exchange for the right to subscribe for ordinary shares, par value $0.001 per share, of Holdings, and, following such contribution, the Rollover Shareholders will beneficially own 100% of Holdings.

The registered office of Holdings is located at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands and its telephone number is +86 10 8418 6655.

Merger Sub

ChinaEdu Merger Sub Limited (“Merger Sub”) is an exempted company with limited liability incorporated under the laws of the Cayman Islands and a direct wholly-owned subsidiary of Holdings. Merger Sub was formed by Holdings solely for the purpose of effecting the Merger. The registered office of Merger Sub is located at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands and its telephone number is +86 10 8418 6655.

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Mrs. Julia Huang  —  Executive Chairman of the Board of Directors of the Company

Mrs. Julia Huang is the executive chairman of the board of directors of the Company. She is the beneficial owner of 8.4% of the total number of outstanding ordinary shares of the Company, par value $0.01 per share (“Shares”), as of the date of this proxy statement. Immediately prior to the effective time of the Merger (as defined below), all of the Shares held by Mrs. Huang will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, Mrs. Huang will beneficially own 14.7% of Holdings. Mrs. Huang is an affiliate of South Lead Technology Limited. The business address for Mrs. Huang is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and her telephone number is +86 10 8418 6262. Mrs. Huang is a citizen of the United States of America.

South Lead Technology Limited

South Lead Technology Limited was formed for the purpose of holding investments. It is a business company incorporated under the laws of the British Virgin Islands with its registered address at Global Trade Mansion, Building B, Apt 16E, No. 9 Guanghua Road, Beijing 100020 and its telephone number is + 86 10 6522 5717. Mrs. Julia Huang, the executive chairman of the board of directors of the Company, is the sole director of South Lead Technology Limited.

Mr. Shawn Ding — Chief Executive Officer and Director of the Company

Mr. Shawn Ding is the chief executive officer and a director of the Company. He is the beneficial owner of 10.4% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, all of the Shares held by Mr. Ding will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, Mr. Ding will beneficially own 18.2% of Holdings. Mr. Ding is an affiliate of Moral Known Industrial Limited. The business address for Mr. Ding is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and his telephone number is + 86 10 8418 6565. Mr. Ding is a citizen of the United States of America.

Moral Known Industrial Limited

Moral Known Industrial Limited was formed for the purpose of holding investments. It is an business company incorporated under the laws of the Cayman Islands with its registered address at P.O. Box 3444, Road Town, Tortola, British Virgin Islands and its telephone number is +86 10 8418 6655. Mr. Ding, the chief executive officer and director of the Company, is the sole director of Moral Known Industrial Limited.

InterVision Technology Limited

InterVision Technology Limited was formed for the purpose of holding investments. It is the beneficial owner of 5.8% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, all of the Shares held by the company will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, InterVision Technology Limited will beneficially own 10.2% of Holdings. It is a business company incorporated under the laws of British Virgin Islands. The registered office of InterVision Technology Ltd. is located at Citco Building, Wickhams Cay, P.O. Box 662, Road Town, Tortola, British Virgin Islands and its telephone number is ++86 10 8418 6655.

Lingyuan Furong Investment Management Company Limited

Lingyuan Furong Investment Management Company Limited was formed for the purposes of holding investments. It is the beneficial owner of 5.4% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, all of the Shares held by the company will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, Lingyuan Furong Investment Management Company Limited will beneficially own 9.5% of Holdings. It is a business company incorporated under the laws of British Virgin Islands. The registered office of Lingyuan Furong Investment Management Company Limited is located at P.O. Box 3444, Road Town, Tortola, British Virgin Islands and its telephone number is +86 10 5130 7338.

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MLP Holdings Limited

MLP Holdings Limited was formed for the purposes of holding investments. MLP Holdings Limited is the beneficial owner of 6.6% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, all of the Shares held by MLP Holdings Limited will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, MLP Holdings Limited will beneficially own 11.7% of Holdings. It is a business company incorporated under the laws of British Virgin Islands. The registered office of MLP Holdings Limited is located at P.O. Box 3444, Road Town, Tortola, British Virgin Islands and its telephone number is +86 10 8418 6655.

New Value Technology Limited

New Value Technology Limited was formed for the purposes of holding investments. It is a business company incorporated under the laws of British Virgin Islands. The registered office of New Value Technology Limited is located at P.O. Box 3444, Road Town, Tortola, British Virgin Islands and its telephone number is +86 10 5130 7338.

McGraw-Hill Global Education Intermediate Holdings, LLC

McGraw-Hill Global Education Intermediate Holdings, LLC (“McGraw-Hill Education”) was formed for the purposes of engaging in the business of owning the securities of its direct and indirect subsidiaries which are engaged in the business of providing educational solutions to improve learning outcomes around the world. McGraw-Hill Education is the beneficial owner of 15.8% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, 3,377,336 Shares held by McGraw-Hill Education will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement and 1,392,900 Shares held by McGraw-Hill Education will be cashed out on the same terms offered to the Company’s unaffiliated shareholders. Following the closing of the Merger, McGraw-Hill Education will beneficially own 19.7% of Holdings. In addition, promptly following the closing of the Merger, McGraw-Hill Education will have the right to designate a number of directors to the board of directors of each of Holdings and the Surviving Corporation (as defined below), and, in each case, each committee thereof, if any, as is proportionate to McGraw-Hill Education’s equity ownership in Holdings. Other than board representation, McGraw-Hill Education did not receive any additional shareholder rights in Holdings following the Merger. McGraw-Hill Education is a company formed under the laws of the State of Delaware, U.S.A. The registered office of McGraw-Hill Education is located at 2 Penn Plaza, New York, NY 10121 and its telephone number is +1 646 766 2009.

Weblearning Company Limited

Weblearning Company Limited (“Weblearning”) was formed for the purposes of holding investments. It is a business company incorporated under the laws of British Virgin Islands. The registered office of Weblearning is located at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and its telephone number is +86 10 8418 6655.

Mrs. Ellen Huang

Mrs. Ellen Huang is a shareholder of the Company. The business address for Mrs. Huang is 15 Warren Street, Apt 406, Jersey City, NJ 07302 and her telephone number is +1 201 656 1399. Mrs. Huang has been self employed during the past five years. Mrs. Huang is a citizen of China.

Mr. Guo Young

Mr. Guo Young is a shareholder of the Company. The business address for Mr. Young is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and his telephone number is +86 10 6526 2400. Mr. Young has been a partner with IDG Capital Partners during the past five years. Mr. Young is a citizen of the United States of America.

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Mrs. Gegeng Tana

Mrs. Gegeng Tana is a shareholder of the Company. The business address for Mrs. Tana is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and her telephone number is +86 10 8418 6655. Mrs. Tana has been self employed during the past five years. Mrs. Tana is a citizen of China.

Mr. Mei Yixin — Chief Financial Officer of the Company

Mr. Mei Yixin is the Chief Financial Officer of the Company. He is the beneficial owner of 0.7% of the total number of outstanding Shares as of the date of this proxy statement. Immediately prior to the effective time of the Merger, all of the Shares held by Mr. Yixin will be converted into and exchanged for the right to receive securities of Holdings pursuant to the terms of the Contribution Agreement. Following the consummation of the Merger, Mr. Yixin will beneficially own 1.3% of Holdings. The business address for Mr. Yixin is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and his telephone number is +86 10 8418 6655. Mr. Yixin is a citizen of Canada. Mr. Mei Yixin joined the Company on November 1, 2011. Prior to joining the Company, Mr. Mei Yixin was a Senior Manager in the audit department of Deloitte Touche Tohmatsu Certified Public Accountants LLP, Beijing office from January 17, 2011 to October 1, 2011. The business address of Deloitte Touche Tohmatsu Certified Public Accountants LLP, Beijing office is 8/F Deloitte Tower, Oriental Plaza, 1 East Chang An Avenue, Beijing 100738, PRC. Prior to working with Deloitte Touche Tohmatsu Certified Public Accountants LLP, Beijing office, Mr. Mei Yixin was a Senior Manager in the assurance and advisory department with Ernst & Young LLP, Vancouver office from July 15, 2007 to December 31, 2010. The business address of Ernst & Young LLP, Vancouver office is Pacific Centre, 700 West Georgia Street, V7Y 1C7 Vancouver, Canada.

Mr. Pan Zhixin

Mr. Pan Zhixin is a shareholder of the Company. The business address for Mr. Zhixin is 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, China and his telephone number is +86 10 8418 6655. Mr. Zhixin has been an officer of the Company during the past five years. Mr. Zhixin is a citizen of China.

During the last five years, none of the persons referred to above under the heading titled “The Parties Involved in the Merger”, or the respective directors or executive officers of the Company, members of the Buyer Group and their affiliates as listed in Annex D of this proxy statement has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

The Rollover Shareholders, Holdings and Merger Sub are collectively referred to in this proxy statement as the “Buyer Group.”

The Merger

The Company, Holdings and Merger Sub entered into an agreement and plan of merger (the “Merger Agreement”) on December 31, 2013. Under the terms of the Merger Agreement, and assuming the requisite vote of the shareholders of the Company and the other conditions to completion of the transactions contemplated thereunder are satisfied or waived in accordance with the terms of the Merger Agreement, the following will occur:

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Following and as a result of the Merger:

A copy of the Merger Agreement is attached as Annex A-1 to this proxy statement. You should read the Merger Agreement in its entirety because it, and not this proxy statement, is the legal document that governs the Merger.

If the Merger is approved, the Company will file a plan of merger substantially in the form attached as Appendix 1 to the Merger Agreement (the “Cayman Plan of Merger”) with the Cayman Islands Registrar of Companies (the “Registrar”). A copy of the Cayman Plan of Merger is included as Annex A-2 to the accompanying proxy statement. The Merger will be effective on the date as specified in the Cayman Plan of Merger.

Merger Consideration

Under the terms of the Merger Agreement, at the effective time of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger will be cancelled and cease to exist and will be converted into and exchanged for the right to receive $2.33 and each of the Company’s ADSs will be cancelled in exchange for the right to receive $7.00, in each case, in cash, without interest and net of any applicable withholding taxes. The following Shares (including Shares represented by ADSs) will not be converted into the right to receive the consideration described in the immediately preceding sentence:

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Treatment of Company Options and Company RSUs

Each option to purchase Shares granted pursuant to the Company Plan (each, a “Company Option”) that is then outstanding and unexercised will be cancelled and converted into and exchanged for the right to receive an option to purchase ordinary shares of Holdings (each, a “Holdings Option”). Each Holdings Option shall have an exercise or purchase price equal to the exercise or purchase price of the corresponding Company Option. Each Holdings Option shall otherwise retain the same grant date, the same vesting or exercise schedule, the same term and expiration date and substantially the same other material terms and conditions as each Company Option.

Each restricted share unit granted pursuant to the Company Plan (each, a “Company RSU”) that is outstanding will be cancelled and converted into and exchanged for the right to receive a restricted share unit of Holdings (each, a “Holdings RSU”). Each Holdings RSU shall be subject to the same material terms and conditions as each Company RSU.

Record Date and Voting

You are entitled to vote at the extraordinary general meeting if you own Shares as of the close of business in the Cayman Islands on March 31, 2014, the Share record date for voting at the extraordinary general meeting. If you own Shares at the close of business in the Cayman Islands on the Share record date, the deadline for you to lodge your proxy card and vote is April 17, 2014 at 5:00 p.m. (Beijing time). If you own ADSs, you cannot attend or vote at the extraordinary general meeting directly, but you may instruct the ADS Depositary, as the holder of the Shares underlying the ADSs, how to vote the Shares underlying your ADSs. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to vote the underlying Shares at the extraordinary general meeting. Alternatively, you may attend and vote directly at the extraordinary general meeting if you surrender your ADSs to the ADS Depositary, pay the ADS cancellation fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that you have not given, and will not give, voting instructions as to the ADSs before the close of business in New York City on March 26, 2014, and become a holder of Shares by the close of business in the Cayman Islands on March 31, 2014, the Share record date. In addition, if you hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the extraordinary general meeting. Each outstanding Share on the record date entitles the holder thereof to one vote on each matter submitted to the shareholders for approval at the extraordinary general meeting and any adjournment or postponement thereof. We expect that, as of the Share record date, there would be Shares entitled to be voted at the extraordinary general meeting. See “— Voting Information” below.

Shareholder Vote Required to Approve and Authorize the Merger Agreement, the Cayman Plan of Merger and the Transactions Contemplated Thereby, Including the Merger

The Merger cannot be completed unless the Merger Agreement and the Cayman Plan of Merger are approved and authorized by (i) a special resolution approved by an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting, referred to herein as a “special resolution,” and (ii) a resolution approved by the affirmative vote of shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the extraordinary general meeting.

Based on the number of Shares expected to be outstanding on the record date and the numbers of Shares beneficially owned by the Rollover Shareholders, (i) approximately 17,165,939 Shares and (ii) approximately 5,927,785 Shares excluding the Shares held by the Rollover Shareholders must be voted in favor of the proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and approve the transactions contemplated thereby, including the Merger, in order for the proposal to be approved, assuming all shareholders will be present and voting in person or by proxy at the extraordinary general meeting.

As of the date of this proxy statement, the Rollover Shareholders, as a group, beneficially owns 18,500,961 Shares (including Shares represented by ADSs), which represent approximately 61.4% of the total outstanding Shares of the Company, including 4,375,160 Shares underlying Company Options and Company RSUs exercisable by the Rollover Shareholders within sixty days of the date hereof. Pursuant to the terms of

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the Merger Agreement as well as a voting agreement entered into among the Buyer Group, Holdings and the Company on December 31, 2013 (the “Voting Agreement”, and together with the Merger Agreement, the Cayman Plan of Merger and the Contribution Agreement, the “Transaction Documents”), 14,125,801 of these Shares, representing 54.9% of the total outstanding Shares of the Company (the “Voting Shares”), will be voted in favor of the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, at the extraordinary general meeting of the Company.

If your Shares are held in the name of a broker, bank or nominee, your broker, bank or nominee will not vote your Shares in the absence of specific instructions from you. These non-voted Shares are referred to as “broker non-votes.”

Voting Information

Before voting your Shares, we encourage you to read this proxy statement in its entirety, including all of the annexes, attachments, exhibits and materials incorporated by reference, and carefully consider how the Merger will affect you. To ensure that your Shares can be voted at the extraordinary general meeting, please complete the enclosed proxy card in accordance with the instructions set forth on the proxy card as soon as possible. The deadline for you to lodge your proxy is April 17, 2014 at 5:00 p.m. (Beijing time). If a broker holds your Shares in “street name,” your broker should provide you with instructions on how to vote your Shares.

Our board of directors recommends that you vote FOR the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the approval of the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger, and FOR the proposal that the chairman of the extraordinary general meeting be instructed to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

If you own ADSs as of the close of business in New York City on March 17, 2014, you cannot attend or vote at the extraordinary general meeting directly, but you may instruct the ADS Depositary (as the holder of the Shares underlying the ADSs) how to vote the Shares underlying your ADSs. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to ensure your Shares are properly voted at the extraordinary general meeting. Alternatively, you may attend and vote directly at the extraordinary general meeting if you cancel your ADSs and become a registered holder of Shares prior to the close of business in the Cayman Islands on March 31, 2014. If you wish to cancel your ADSs for the purpose of voting Shares, you need to make arrangements to deliver your ADSs to the ADS Depositary for cancellation before the close of business in New York City on March 26, 2014 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of Shares), (b) payment of the ADS cancellation fees (up to $0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that you held the ADSs as of the ADS record date and you have not given, and will not give, voting instructions to the ADS Depositary as to the ADSs being cancelled or have given voting instructions to the ADS Depositary as to the ADSs being cancelled but undertake not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS Depositary will arrange for The Hong Kong and Shanghai Banking Corporation Limited, the custodian holding the Shares, to transfer registration of the Shares to the former ADS holder (or a person designated by the former ADS holder). If after registration of Shares in your name, you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the registrar of the Shares to issue and mail a certificate to your attention.

Dissenters’ Rights of Shareholders and ADS Holders

Shareholders who elect to dissent from the Merger will have the right to receive payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is

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taken at the EGM, a written objection to the Merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters’ rights. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration which such dissenting shareholder would otherwise have received pursuant to the Merger Agreement if they had not exercised dissenters’ rights with respect to their Shares.

ADS HOLDERS WILL NOT HAVE THE RIGHT TO SEEK EXERCISE DISSENTERS’ RIGHTS AND TO RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS’ RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS’ RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY’S FEES REQUIRED FOR THE CANCELLATION OF THE ADSs, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs (OR, ALTERNATIVELY, THAT THEY WILL NOT VOTE THE SHARES) BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON MARCH 26, 2014, AND BECOME HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON MARCH 31, 2014. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS’ RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW.

We encourage you to read the section of this proxy statement entitled “Dissenters’ Rights” as well as Annex C to this proxy statement carefully and to consult your Cayman Islands legal counsel if you desire to exercise your dissenters’ rights.

Purposes and Effects of the Merger

The purpose of the Merger is to enable Holdings to acquire 100% control of the Company in a transaction in which the Company’s shareholders and ADS holders (excluding the Rollover Shares) will be cashed out in exchange for $2.33 per Share (or $7.00 per ADS). Please see “Special Factors — Purposes of and Reasons for the Merger” beginning on page 59 for additional information.

ADSs representing Shares of the Company are currently listed on NASDAQ under the symbol “CEDU”. Following the consummation of the Merger, the Company will cease to be a publicly traded company and will instead become a private company beneficially owned by the Buyer Group. After the Merger, the Shares will cease to be listed on NASDAQ, and price quotations with respect to sales of Shares in the public market will no longer be available. In addition, registration of the Company’s Shares under the Exchange Act will be terminated. After the effective time of the Merger, the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the United States federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies. Please see “Special Factors — Effects of the Merger on the Company” beginning on page 60 for additional information.

Plans for the Company after the Merger

Following the completion of the Merger, the Buyer Group anticipates that the Company will continue to conduct its operations substantially as they are currently being conducted, except that it will cease to be a publicly traded company and will instead be a wholly-owned subsidiary of the Holdings and beneficially owned by the Buyer Group. The Company will no longer be subject to the Exchange Act, or NASDAQ compliance and reporting requirements and accordingly will not incur the related direct and indirect costs and expenses associated with being subject to the Exchange Act and NASDAQ compliance and reporting requirements.

The Buyer Group has advised the Company that, except for the transactions contemplated by the Merger Agreement and transactions already under consideration by the Company, the Buyer Group does not have any current plans, proposals or negotiations that relate to or would result in any of the following:

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Recommendation of the Independent Committee and Our Board of Directors

An independent committee of the board of directors of the Company, composed solely of directors of the Company who are unaffiliated with any Rollover Shareholder or any of the management members of the Company, namely Messrs. Samuel Yen, Min Fan and Tianwen Liu (the “Independent Committee”), unanimously (a) determined that the Transaction Documents, the Merger, and the transactions contemplated thereby are advisable and in the best interest of the Company and its shareholders, as a general body and of the Company as a whole, (b) determined that the Merger and the Merger consideration is fair and reasonable, and (c) recommended that the board of directors of the Company approve the Transaction Documents, in the form presented to the Independent Committee, the Merger and other transactions contemplated by the Transaction Documents, the same being fair and reasonable to, advisable and in the best interests of the Company and its shareholders, in accordance with Cayman Islands laws. ACCORDINGLY, OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL AND AUTHORIZATION OF THE MERGER AGREEMENT, THE CAYMAN PLAN OF MERGER AND THE APPROVAL OF THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, FOR THE PROPOSAL TO AUTHORIZE THE DIRECTORS AND OFFICERS OF THE COMPANY TO DO ALL THINGS NECESSARY TO GIVE EFFECT TO THE MERGER AGREEMENT AND THE CAYMAN PLAN OF MERGER, AND FOR THE PROPOSAL TO INSTRUCT THE CHAIRMAN OF THE EXTRAORDINARY GENERAL MEETING TO ADJOURN OR POSTPONE THE EXTRAORDINARY GENERAL MEETING IN ORDER TO ALLOW THE COMPANY TO SOLICIT ADDITIONAL PROXIES IN THE EVENT THAT THERE ARE INSUFFICIENT PROXIES RECEIVED AT THE TIME OF THE EXTRAORDINARY GENERAL MEETING TO PASS THE SPECIAL RESOLUTIONS TO BE PROPOSED AT THE EXTRAORDINARY GENERAL MEETING.

The primary benefits of the Merger to the Company’s unaffiliated shareholders and ADS holders include, without limitation, the fact that the per ADS merger consideration represents a 19.9% premium over the closing price of $5.84 per ADS as quoted by NASDAQ on June 19, 2013, the last trading day prior to the Company’s announcement on June 20, 2013 that it had received a “going private” proposal, and a 16.9% and 13.9% premium to the volume-weighted average closing price of the Company’s ADSs during the 30 and 60 trading days prior to June 20, 2013, respectively.

The primary detriments of the Merger to the Company’s unaffiliated shareholders and ADS holders include, without limitation, the following:

The foregoing summary of information and factors considered by the Independent Committee and our board of directors is not intended to be exhaustive. For a more detailed discussion of the material factors considered by our board of directors and the Independent Committee in determining to recommend the approval of the Merger Agreement and the approval of the transactions contemplated thereby and in determining that the Merger is substantively and procedurally fair to our unaffiliated shareholders and ADS holders, see “Special Factors — Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors” beginning on page 40 and “Special Factors — Effects of the Merger on the Company” beginning on page 60 for additional information. The foregoing summary is qualified in its entirety by reference to these sections.

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Position of the Buyer Group as to Fairness of the Merger

Except as stated elsewhere in this proxy statement, each member of the Buyer Group believes that the Merger is substantively and procedurally fair to the Company’s unaffiliated shareholders and ADS holders. McGraw-Hill Education believes that the Merger is substantively and procedurally fair to the Company’s unaffiliated shareholders and ADS holders; however, McGraw-Hill Education has stated to the Independent Committee and publicly in its filings with the SEC (i) that the June 20 Proposal (as defined below) undervalues the Company, (ii) that it did not want to sell its Shares on the terms of the June 20 Proposal and (iii) that it preferred to roll over its Shares in the Merger and remain a shareholder of the Company following the Merger. Notwithstanding McGraw-Hill Education’s agreement to sell 1,392,900 Shares in the Merger, McGraw-Hill Education has not changed its views of the Merger from its prior public statements. The respective beliefs of the members of the Buyer Group are based upon the factors discussed under the caption “Special Factors — Position of the Buyer Group as to the Fairness of the Merger” beginning on page 45.

Each member of the Buyer Group is making the statements included in this paragraph solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of each member of the Buyer Group as to the fairness of the Merger are not intended to be and should not be construed as a recommendation to any shareholder of the Company as to how that shareholder should vote on the proposal to approve the Merger Agreement and the transactions contemplated thereby, including the Merger.

Financing of the Merger

The Company and the Buyer Group estimate that the total amount of funds necessary to complete the Merger and the related transactions, including payment of fees and expenses in connection with the Merger, is anticipated to be approximately $32.0 million, assuming no exercise of dissenters’ rights by shareholders of the Company. In calculating this amount, the Company and the Buyer Group do not consider the value of the Rollover Shares which will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings. This amount is expected to be funded through a debt financing of $30.0 million to be funded by China Merchants Bank Co., Ltd., Hong Kong Branch (“China Merchants Bank”) pursuant to a debt financing agreement; and (b) cash from the resources of the Company and its subsidiaries. See “Special Factors — Financing” beginning on page 64 for additional information.

Share Ownership of the Company Directors and Officers and Voting Commitments

As of the date of this proxy statement, Mr. Shawn Ding, the chief executive officer and a director of the Company, beneficially owns approximately 10.4% of the total outstanding Shares, Mrs. Julia Huang, the executive chairman of the board of directors, beneficially owns approximately 8.4% of the total outstanding Shares, and our directors and executive officers (other than Mr. Ding, Mrs. Huang and Mr. Yixin Mei) collectively beneficially own 703,600 Shares (including Shares represented by ADSs), or approximately 2.3% of the total outstanding Shares. Please see “Security Ownership of Certain Beneficial Owners and Management of the Company” beginning on page 104 for additional information regarding the ownership of Shares by the other directors and executive officers of the Company.

Pursuant to the Merger Agreement, provided that there is no change of recommendation by our board of directors, Holdings has agreed to use its reasonable best efforts to cause all of the Voting Shares to (i) appear at the extraordinary general meeting or otherwise be counted as present thereat for purpose of determining whether a quorum is present and (ii) be voted in favor of the approval of the Merger Agreement and the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger.

Pursuant to the Voting Agreement, each of the Rollover Shareholders has agreed to (i) appear or otherwise cause his, her or its Voting Shares to be counted as present for purpose of calculating a quorum at any meeting of the Company’s shareholders where any vote, consent or other approval is taken in respect of the Merger Agreement and ensure that any vote at such meeting be a poll vote, (ii) vote or otherwise cause to be voted all of his, her or its Voting Shares (x) in favor of the approval of the Merger Agreement and the transactions contemplated thereby and any related action reasonably required in furtherance thereof, (y) against any other acquisition proposal, (z) against any action, agreement or transaction that is intended,

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that could reasonably be expected, or the effect of which could reasonably be expected, to materially impede, interfere with, delay or postpone, discourage or adversely affect the Merger Agreement or the transactions contemplated thereby, and (iii) not enter into at any time prior to the termination of the Voting Agreement, any voting trust agreement or any other contract (other than the Contribution Agreement) with respect to any Voting Shares.

Opinion of Financial Advisor to the Independent Committee

On December 30, 2013, Houlihan Lokey (China) Limited (“Houlihan Lokey”), rendered an oral opinion to the Independent Committee (which was confirmed in writing by delivery of Houlihan Lokey’s written opinion dated December 30, 2013), as to the fairness, from a financial point of view, of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs), as of December 30, 2013, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion.

Houlihan Lokey’s opinion was directed to the Independent Committee and only addressed the fairness from a financial point of view of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) and does not address any other aspect or implication of the Merger. The full text of Houlihan Lokey’s written opinion is included as Annex B to this proxy statement and is incorporated herein by reference. You are encouraged to read the written opinion in its entirety for the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, Houlihan Lokey’s opinion, the summary of its opinion and the related analyses set forth in this proxy statement were not intended to be, and do not constitute advice or a recommendation to the Independent Committee or any holder of Shares or ADSs as to how to act or vote with respect to the Merger or related matters. Houlihan Lokey’s opinion should not be construed as creating any fiduciary duty on Houlihan Lokey’s part to any party or entity. Please see “Special Factors — Opinion of Houlihan Lokey, the Independent Committee’s Financial Advisor” beginning on page 51 for additional information.

Interests of the Company’s Executive Officers and Directors in the Merger

In considering the recommendations of the board of directors, the Company’s shareholders should be aware that certain of the Company’s directors and executives have interests with respect to the Merger that are, or may be, different from, or in addition to those of the Company’s shareholders generally. These interests include, among others:

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As of the date of this proxy statement, our directors and executive officers (other than Mr. Shawn Ding, Mrs. Julia Huang and Mr. Yixin Mei) collectively beneficially own 703,600 Shares (including Shares represented by ADSs), or, approximately 2.3% of the total outstanding Shares. The maximum amount of cash payments our directors and executive officers (other than Mr. Shawn Ding, Mrs. Julia Huang and Mr. Yixin Mei) may receive in respect of their Shares if the Merger is consummated is approximately $0.8 million. Please see “Special Factors — Interests of Certain Persons in the Merger” beginning on page 66 for additional information.

The Independent Committee and our board of directors were aware of these potential conflicts of interest and considered them, among other matters, in reaching their decisions and recommendations with respect to the Merger Agreement and related matters. Please see “Special Factors — Interests of Certain Persons in the Merger” beginning on page 66 for additional information.

Limitation on Solicitation and Considering Acquisition Proposals

Until the effective time of the Merger or, if earlier, the termination of the Merger Agreement, the Company, its subsidiaries and their respective representatives may not:

At any time after the date of the Merger Agreement and prior to the time the Company’s shareholders approve the Merger Agreement, if the Company receives a written bona fide acquisition proposal that did not result from a breach of the Company’s “no-shop” obligations described above and that the Independent Committee determines, in its good faith judgment, after consultation with its outside legal counsel and

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financial advisors, constitutes or may reasonably be expected to lead to a superior proposal (as defined under the Merger Agreement), the Company may, subject to a customary confidentiality agreement satisfying the requirements of the Merger Agreement, furnish information and data with respect to the Company and its subsidiaries to, and participate, through the Independent Committee, in discussions or negotiations regarding such acquisition proposal with, a person and its representatives who has made such proposal, provided that the Company shall promptly (and in any event, within 72 hours) provide or make available to Holdings any material non-public information concerning the Company or any of its subsidiaries that is provided to the person making such acquisition proposal or its representatives which was not previously or concurrently provided or made available to Holdings.

No Change of Recommendation

Prior to the time the Company’s shareholders approve the Merger Agreement, the board of directors of the Company (upon recommendation of the Independent Committee which has made its determination in good faith and after consultation with its outside legal counsel and financial advisors) may, subject to certain notice requirements, (a) make a change of recommendation if the Independent Committee determines that the failure to do so would reasonably be expected to be inconsistent with its fiduciary duties under applicable law, or (b) if the Company receives a written bona fide acquisition proposal that did not result from a breach of the Company’s “no-shop” obligations described above that the Independent Committee determines constitutes a superior proposal, make a change of recommendation or authorize the Company to terminate the Merger Agreement to enter into an alternative acquisition agreement.

Conditions to the Merger

The consummation of the Merger is subject to the satisfaction of the following conditions:

The obligations of Holdings and Merger Sub to effect the Merger are also subject to the satisfaction, or waiver by Holdings, of the following conditions:

The obligations of the Company to effect the Merger are subject to the satisfaction, or waiver by the Company, of the following conditions:

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Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the effective time of the Merger:

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Remedies

The Company, Holdings and Merger Sub are each entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions thereof, in addition to any other remedy to which it is entitled under the Merger Agreement.

Material U.S. Federal Income Tax Consequences

The receipt of cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. See “Special Factors — Material U.S. Federal Income Tax Consequences” beginning on page 71. The tax consequences of the Merger to you will depend upon your own personal circumstances. You should consult your tax advisors for a full understanding of the U.S. federal, state, local, non-U.S. and other tax consequences of the Merger to you.

Material PRC Income Tax Consequences

The Company does not believe that it should be considered a resident enterprise under the PRC Enterprise Income Tax Law (the “EIT Law”) or that the gain recognized on the receipt of cash for our Shares or ADSs should be subject to PRC tax to holders of such Shares and ADSs that are not PRC residents. If, however, the PRC tax authorities were to determine that the Company should be considered a resident enterprise or that the receipt of cash for our Shares or ADSs should otherwise be subject to PRC tax, then gain recognized on the receipt of cash for our Shares or ADSs pursuant to the Merger or through the exercise of dissenters’ rights by our shareholders or ADSs holders who are not PRC residents could be treated as PRC-source income that would be subject to PRC income tax at a rate of 20% in the case of individuals or 10% in the case of corporations (subject to applicable treaty relief). You should consult your own tax advisor for a full understanding of the tax consequences of the Merger or the exercise of disseenters’ rights to you, including any PRC tax consequences. Please see “Special Factors — Material PRC Income Tax Consequences” beginning on page 73 for additional information.

Material Cayman Islands Tax Consequences

The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the Merger or the receipt of cash for our Shares under the terms of the Merger Agreement. This is subject to the qualification that (a) Cayman Islands stamp duty may be payable if any Transaction Documents are brought to or executed or produced before a court in the Cayman Islands; and (b) registration fees will be payable to the Registrar of Companies to register the Cayman Plan of Merger. Please see “Special Factors — Material Cayman Islands Tax Consequences” beginning on page 74 for additional information.

Regulatory Matters

The Company does not believe that any material federal, state or non-U.S. regulatory approvals, filings or notices are required in connection with the Merger other than the approvals, filings or notices required under the federal securities laws and the filing of the Cayman Plan of Merger (and supporting documentation as specified in the Cayman Companies Law) with the Cayman Islands Registrar of Companies and in the event

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the Merger becomes effective, a copy of the certificate of merger being given to the shareholders and creditors of the Company and Merger Sub as at the time of the filing of the Cayman Plan of Merger and notice of Merger being published in the Cayman Islands Gazette.

Accounting Treatment of the Merger

The Merger is expected to be accounted for at historical cost as a merger of entities under common control in accordance with Accounting Standards Codification 805-50, “Business Combinations — Related Issues.”

Market Price of the ADSs

The closing price of the Shares on the NASDAQ on June 19, 2013, the last trading date immediately prior to the Company’s announcement on June 20, 2013 that it had received a going private proposal, was $5.84 per ADS. The merger consideration of $7.00 per ADS to be paid in the Merger represents a premium of approximately 19.9% over that closing price.

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QUESTIONS AND ANSWERS ABOUT THE EXTRAORDINARY
GENERAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the extraordinary general meeting and the Merger. These questions and answers may not address all questions that may be important to you as a shareholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

If you own ADSs immediately prior to the effective time of the Merger and are not a member of the Buyer Group and the Merger is completed, you will be entitled to receive $7.00 per ADS in cash, without interest and net of any applicable withholding taxes, for each ADS you own.

Please see “Special Factors — Material U.S. Federal Income Tax Consequences,” “Special Factors —  Material PRC Income Tax Consequences” and “Special Factors — Material Cayman Islands Tax Consequences” beginning on page 74 for a description of the material U.S. federal, PRC and Cayman Islands tax consequences of the Merger. You should consult your own tax advisor for a full understanding of how the Merger will affect your U.S. federal, state, local, non-U.S. and other taxes.

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In the event that a transfer of ownership of Shares is not registered in the register of members of the Company, or if the per Share merger consideration is to be paid in a name other than that in which the relevant Shares are registered in the register of members of the Company, the per Share merger consideration may be paid to a person other than the person in whose name the relevant Share is registered in the register of members of the Company only upon delivery of evidence to the satisfaction of the paying agent of such person’s entitlement to the relevant Share and if the person requesting such payment has paid to the paying agent any transfer taxes required by reason of the payment of the per Share merger consideration to a person other than the registered holder of such Shares, or established to the satisfaction of the paying agent that such transfer taxes have been paid or are otherwise not payable.

If your Shares are held in “street name” by your broker, bank or other nominee, you will receive instructions from your broker, bank or other nominee on how to surrender your Shares and receive the merger consideration for those Shares.

In the event of a transfer of ownership of ADSs that is not registered in the register of ADS holders maintained by the ADS Depositary, the check for any cash to be exchanged upon cancellation of the ADSs will be issued to such transferee only if the ADRs, if applicable, are presented to the ADS Depositary, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable ADS transfer taxes have been paid or are not applicable. The per ADS merger consideration may be subject to U.S. federal income tax backup withholding if the ADS Depositary has not received from the transferee a properly completed and signed IRS Form W-8 or W-9, as applicable.

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If your ADSs are held in “street name” by your broker, bank or other nominee, you will not be required to take any action to receive the merger consideration for your ADSs as the ADS Depositary will arrange for the surrender of the ADSs and the remittance of the per ADS merger consideration with The Depository Trust Company (the clearance and settlement system for the ADSs) for distribution to your broker, bank or nominee on your behalf. If you have any questions concerning the receipt of the per ADS merger consideration, please contact your broker, bank or nominee.

At the close of business in the Cayman Islands on March 31, 2014, the Share record date for the extraordinary general meeting, 25,748,908 Shares were outstanding and entitled to vote at the extraordinary general meeting.

As of the date of this proxy statement, the Buyer Group, as a group, beneficially owns 18,500,961 Shares, which represent approximately 61.4% of the total outstanding Shares and Company Options and Company RSUs exercisable within sixty days of the date hereof. Pursuant to the terms of the Merger Agreement and the Voting Agreement, 14,125,801 of these Shares, representing 54.9% of the total outstanding Shares of the Company, will be voted in favor of the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the Merger at the extraordinary general meeting of the Company. The voting obligations of the Rollover Shareholders contained in the Voting Agreement terminate (a) with respect to McGraw-Hill Education only, in the event that McGraw-Hill Education withdraws from the Buyer Group in accordance with the Consortium Agreement, as amended (defined below), in relation to an amendment or waiver of any term or condition in or the granting of any consent under the Merger Agreement, or (b) upon the earliest to occur of (i) the effective time of the Merger and (ii) the valid termination of the Merger Agreement in accordance with its terms. See “Special Factors — Voting by the Buyer Group at the Extraordinary General Meeting” beginning on page 70 for additional information on such voting arrangements and how they may impact the approval and adoption of the Merger Agreement and the transactions contemplated thereby at the extraordinary general meeting.

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You should read “Special Factors — Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors” beginning on page 40 for a discussion of the factors that our Independent Committee and board of directors considered in deciding to recommend the approval of the Merger Agreement. In addition, in considering the recommendation of our Independent Committee and board of directors with respect to the Merger Agreement, you should be aware that some of the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our shareholders generally. See “Special Factors — Interests of Certain Persons in the Merger” beginning on page 66.

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Alternatively, you can attend the extraordinary general meeting and vote in person. If you decide to sign and send in your proxy card and do not indicate how you want to vote in your proxy card, the Shares represented by your proxy will be voted FOR the proposal to approve and authorize the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting, unless you appoint a person other than the chairman of the meeting as proxy, in which case the Shares represented by your proxy card will be voted (or not submitted for voting) as your proxy determines. If your Shares are held by your broker, bank or other nominee, please see below for additional information.

Alternatively, you may vote at the extraordinary general meeting if you cancel your ADSs prior to the close of business in New York City on March 26, 2014 and become a holder of Shares by the close of business in the Cayman Islands on March 31, 2014, the Share record date. If your ADSs are held by your broker, bank or other nominee, see below.

If you wish to cancel your ADSs, you need to make arrangements to deliver your ADSs to the ADS Depositary for cancellation prior to the close of business in New York City on March 26, 2014 together with (a) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of Shares), (b) payment of the ADS cancellation fees (up to $0.05 per ADS to be cancelled) and any applicable taxes, and (c) a certification that the ADS holder either (i) held the ADSs

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as of the applicable ADS record date for the extraordinary general meeting and has not given, and will not give, voting instructions to the ADS Depositary as to the ADSs being cancelled, or has given voting instructions to the ADS Depositary as to the ADSs being cancelled but undertakes not to vote the corresponding Shares at the extraordinary general meeting, or (ii) did not hold the ADSs as of the applicable ADS record date for the extraordinary general meeting and undertakes not to vote the corresponding Shares at the extraordinary general meeting. If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS Depositary will arrange for The Hong Kong and Shanghai Banking Corporation Limited, the custodian holding the Shares, to transfer registration of the Shares to the former ADS holder. If after registration of Shares in your name you wish to receive a certificate evidencing the Shares registered in your name, you will need to request the registrar of the Shares to issue and mail a certificate to your attention.

If you hold Shares through a broker, bank or other nominee and have instructed the broker, bank or other nominee to vote your Shares, you must follow directions received from the broker, bank or other nominee to change your instructions.

Holders of our ADSs may revoke their voting instructions by notification to the ADS Depositary in writing at any time prior to 5:00 p.m. (New York City time) on April 15, 2014. A holder of ADSs can do this in one of two ways:

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If you hold your ADSs through a broker, bank or nominee and you have instructed your broker, bank or nominee to give ADS voting instructions to the ADS Depositary, you must follow the directions of your broker, bank or nominee to change those instructions.

All holders of uncertificated Shares and uncertificated ADSs (i.e., holders whose Shares or ADSs are held in book entry) will automatically receive their cash consideration shortly after the Merger is completed without any further action required on the part of such holders.

If your Shares or your ADSs are held in “street name” by your broker, bank or other nominee you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your share certificates or ADRs in exchange for the merger consideration.

The record date of ADSs for the extraordinary general meeting is March 17, 2014 in New York City. If you transfer your ADSs after the ADS record date but before the extraordinary general meeting, you will retain your right to instruct the ADS Depositary to vote at the extraordinary general meeting, but will transfer the right to receive the per ADS merger consideration of $7.00 in cash without interest and net of any applicable withholding taxes to the person to whom you transfer your ADSs, so long as such person owns such ADSs when the merger is completed.

ADS holders will not have the right to exercise dissenters’ rights and to receive payment of the fair value of the Shares underlying their ADSs. The ADS Depositary will not attempt to exercise any dissenters’

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rights with respect to any of the Shares that it holds, even if an ADS holder requests the ADS Depositary to do so. ADS holders wishing to exercise dissenters’ rights must surrender their ADSs to the ADS Depositary, pay the applicable ADS Depositary’s fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that they have not given, and will not give, voting instructions as to the ADSs (or alternatively, they will not vote the Shares) before the close of business in New York City on March 26, 2014, and become registered holders of Shares by the close of business in the Cayman Islands on March 31, 2014. Thereafter, such former ADS holders must comply with the procedures and requirements for exercising dissenters’ rights with respect to the Shares under Section 238 of the Cayman Companies Law.

We encourage you to read the section of this proxy statement entitled “Dissenters’ Rights” beginning on page 95 as well as “Annex C — Cayman Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) — Section 238” to this proxy statement carefully and to consult your own Cayman Islands legal counsel if you desire to exercise your dissenters’ rights.

The deadline for surrendering ADSs to the ADS Depositary for these purposes is the close of business in New York City on March 26, 2014.

You must become a registered holder of your Shares and, prior to vote being taken at the extraordinary general meeting, deliver to the Company a written objection to the Merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters’ rights.

We encourage you to read the section of this proxy statement entitled “Dissenters’ Rights” beginning on page 95 as well as “Annex C — Cayman Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) — Section 238” to this proxy statement carefully and to consult your own Cayman Islands legal counsel if you desire to exercise your dissenters’ rights.

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In order for you to receive timely delivery of any additional copy of this proxy statement or the enclosed proxy card in advance of the extraordinary general meeting, you must make the request no later than five business days prior to the extraordinary general meeting.

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SPECIAL FACTORS

Background of the Merger

Our board of directors and senior management periodically review the Company’s long-term strategic plans with the goal of enhancing shareholder value. As part of this ongoing process, our board of directors and senior management, from time to time, have considered strategic alternatives that may be available to the Company.

On or about May 18, 2013, Mr. Shawn Ding, the chief executive officer and a director of the Company, met in his individual capacity with Mrs. Julia Huang, the executive chairman of the Company’s board of directors, and informally raised the possibility of a potential going private transaction with her. Mr. Ding and Mrs. Huang also spoke during the weeks prior to May 18, 2013 to discuss various other matters regarding the Company.

Between May 18, 2013 and June 20, 2013, Mr. Ding and Mrs. Huang held a number of preliminary discussions to explore the feasibility of a possible going private transaction with respect to the Company, which discussions also touched on the key commercial terms for a potential going private transaction and the draft of the proposal letter to be submitted to the board of directors of the Company.

On June 14, 2013, Mr. Ding and Mrs. Huang appointed Loeb & Loeb LLP (“Loeb & Loeb”) to act on behalf of Shawn Ding, Moral Known Industrial Limited, Julia Huang and South Lead Technology Limited as U.S. counsel for a potential going private transaction (the “Original Buyer Group”). As discussed below, the Original Buyer Group was subsequently expanded to include Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited and Lingyuan Furong Investment Mgmt Co., Ltd. when the parties entered into a consortium agreement on August 16, 2013.

On June 20, 2013, Mr. Ding and Mrs. Huang finalized and delivered the proposal letter to our board of directors to acquire all of the outstanding ordinary shares of the Company not currently owned by them and certain other shareholders of the Company who may join them in a going private transaction for $2.33 in cash per Share, or $7.00 in cash per ADS, subject to certain conditions (the “June 20 Proposal”). In the June 20 Proposal, Mr. Ding and Mrs. Huang, among other things, (a) outlined their intention to work with each other exclusively in pursuing the proposed transaction, (b) stated their expectation that the transaction would be financed by debt and/or equity capital and definitive commitments for the required debt financing and/or equity funding would be in place when the definitive agreements in connection with the transaction are signed, (c) requested a timely opportunity to conduct customary due diligence on the Company, and (d) expected that the independent members of the board of directors of the Company would consider the proposed transaction. Mr. Ding and Mrs. Huang made it clear in the June 20 Proposal that they were interested only in acquiring the Shares not already owned by them and that they had no interest in selling their Shares or ADS in any transaction involving the Company.

Also on June 20, 2013, the Company issued a press release regarding its receipt of the June 20 Proposal and the transaction proposed therein, and furnished the press release as an exhibit to its current report on Form 6-K. The closing price of the Company’s ADSs on June 20, 2013 after the Company publicly announced receipt of the June 20 Proposal was $6.15 per ADS, representing an increase of approximately 5.3% from the closing price of $5.84 per ADS on June 19, 2013, the last trading day before the Company announced receipt of the June 20 Proposal.

At a board meeting convened on June 24, 2013, the Company’s board of directors determined that it was advisable and in the best interests of the Company and its shareholders to establish an independent committee consisting solely of the three independent non-executive directors, Messrs. Samuel Yen, Min Fan and Tianwen Liu, with Mr. Samuel Yen as the chairman of the Independent Committee, to consider and attend to all matters in connection with the June 20 Proposal from Mr. Ding and Mrs. Huang. Thereafter, the Company’s board of directors signed a unanimous written consent dated June 24, 2013 establishing the Independent Committee and empowering it to determine on behalf of the board of directors whether the going private transaction described in the June 20 Proposal is advisable and in the best interests of the Company and its unaffiliated shareholders and ADS holders.

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Between June 24 and July 11, 2013, the Independent Committee evaluated a number of law firms and financial firms, and after consideration of their qualifications, retained Ropes & Gray LLP (“Ropes & Gray”) as its legal counsel and Houlihan Lokey as its independent financial advisor to assist the Independent Committee in its evaluation of the June 20 Proposal and any potential alternative transactions. The Independent Committee’s decision to appoint Ropes & Gray and Houlihan Lokey was based on their extensive experience in merger and acquisition transactions, including take private transactions, the reputation and expertise of these firms and their history of successfully representing China-based companies. On July 11, 2013, the Company issued a press release announcing that the Independent Committee had been established and that Ropes & Gray had been retained as its legal counsel and Houlihan Lokey had been retained as its independent financial advisor.

On July 1, 2013, Mr. Ding and Mrs. Huang jointly filed with the SEC a Schedule 13D in connection with the June 20 Proposal.

Beginning on July 24, 2013, representatives of the Original Buyer Group held preliminary discussions on debt financing for the proposed transaction with China Merchants Bank.

Beginning in August, 2013, representatives of China Merchants Bank conducted due diligence on the Company in relation to their discussions with representatives of the Original Buyer Group on the provisions for a debt facility agreement for the proposed transaction. Between August 1, 2013 and September 13, 2013, the Original Buyer Group and China Merchants Bank negotiated the terms of the debt facility agreement with assistance from their legal counsels.

On July 18, 2013, the Independent Committee convened a telephonic meeting with representatives of Ropes & Gray and Houlihan Lokey, with representatives from the Company joining for a portion of the meeting, to discuss (i) an indicative timeline and process for a take private transaction, (ii) the Original Buyer Group’s plans for securing financing for the proposed transaction; (iii) whether any other shareholders of the Company planned to join the Original Buyer Group; (iv) the advisability of and timing for conducting a “market check” process to seek alternative transactions that may be available to the Company and its shareholders; (iv) the possible approaches for treating share-based compensation in a take private transaction; (v) whether the Original Buyer Group should be asked to enter into a non-disclosure and standstill agreement; and (vi) the Independent Committee’s process and procedures for evaluating the June 20 Proposal. During the meeting, the Independent Committee instructed Ropes & Gray to prepare a non-disclosure and standstill agreement to be sent to the Original Buyer Group.

On July 19, 2013, Ropes & Gray sent a non-disclosure and standstill agreement to Loeb & Loeb, which asked the Original Buyer Group (i) to ensure that members of the Original Buyer Group maintain confidentiality for all information relating to the Company received by the Original Buyer Group, including the content of any negotiations relating to the proposed transaction, and (ii) to abide by a two year “standstill” period during which the members of the Original Buyer Group would not be able to take certain actions including, among other things, adding additional members to the Original Buyer Group or undertaking a tender offer for the Company’s securities, unless such actions are taken with the prior consent of the Independent Committee.

On July 21, 2013, the Independent Committee received a letter, dated July 3, 2013, from McGraw-Hill Education addressed to the disinterested directors of the Company. The letter identified McGraw-Hill Education as the largest shareholder of the Company and expressed McGraw-Hill Education’s belief that the June 20 Proposal undervalued the Company and that alternative transactions could offer greater value to the Company’s shareholders. The letter did not specifically identify any alternative transactions that could offer greater value to the Company’s shareholders and concluded by requesting an opportunity to meet with the disinterested directors of the Company and their financial advisor to discuss McGraw-Hill Education’s perspective on the June 20 Proposal.

On July 23, 2013, the Independent Committee sent a written communication to the Company’s management to request that they not take certain actions, including (a) engaging in any discussions or negotiations or entering into any agreements regarding the proposed transaction, except that management members of the Original Buyer Group at such time can continue discussions with other members of the

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Original Buyer Group at such time; (b) having any discussions or communications with any member of the Original Buyer Group or any affiliate or representative of the Original Buyer Group at such time regarding his or her own employment, compensation or investment arrangements in connection with the proposed transaction; or (c) responding to any press and other third party enquiries and requests for information relating to the proposed transaction in any manner unless, after such enquiry or request has been referred to the Independent Committee or its advisors, he or she has been instructed to respond to such request or enquiry by the Independent Committee.

On July 25, 2013, Houlihan Lokey initiated its financial due diligence on the Company.

On August 2, 2013, representatives from Houlihan Lokey convened a telephonic meeting with Mr. Ding to discuss the proposed transaction and discuss the operations, strategy and growth prospects, among other issues, of the Company.

On August 6, 2013, the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss (i) the Original Buyer Group’s expressed plans to expand to include additional shareholders of the Company; (ii) the Original Buyer Group’s progress in negotiating debt financing for the proposed transaction; (iii) the proposed non-disclosure and standstill agreement that was sent to the Original Buyer Group on July 19, 2013, which the Original Buyer Group had indicated several times during the prior two weeks it was not prepared to sign; and (iv) the process and timing for conducting a market check. The Independent Committee instructed Houlihan Lokey to make preparations for a market check process with a final decision to be made by the Independent Committee pending receipt of further information on the expansion to the Original Buyer Group, if any. The Independent Committee also determined that it would not renew its request that the Original Buyer Group sign the non-disclosure and standstill agreement in light of the Original Buyer Group’s position.

Mr. Ding and Mrs. Huang concluded that the non-disclosure and standstill agreement was not required to be signed in connection with the transaction. Specifically, the Independent Committee's request to approve additional members to be added to the consortium after Mr. Ding and Mrs. Huang submitted the June 20 Proposal was not acceptable. In addition, the Independent Committee’s request that the agreement remain in place for two years was considered unreasonable. In light of the above factors and after conferring with Loeb & Loeb, Mr. Ding and Mrs. Huang concluded that the non-disclosure and standstill agreement went beyond what was required of them under applicable law and refused to sign the agreement.

Concurrently, the Independent Committee determined that the June 20 Proposal was a sufficiently credible proposal and potentially advantageous to the Company’s unaffiliated shareholders and ADS holders that it should continue negotiations with respect to such proposal notwithstanding the refusal to sign the non-disclosure and standstill agreement.

Between June 20 and August 16, 2013, Mr. Ding, Mrs. Huang and certain other shareholders of the Company held discussions regarding their entry into a consortium agreement to work with each other on an exclusive basis to pursue a potential take private transaction with the Company. Due to time constraints and confidentiality considerations of the potential take private transaction, Mr. Ding and Mrs. Huang did not speak at or prior to the time of the announcement of the June 20 Proposal with any other existing shareholders to confirm whether they would become part of their group.

On August 16, 2013, Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited and Lingyuan Furong Investment Management Co., Ltd. entered into a consortium agreement with Mr. Ding, Mrs. Huang, Moral Known Industrial Limited and South Lead Technology Limited to work with each other on an exclusive basis to pursue a potential take private transaction with the Company during a six-month exclusivity period (the “Consortium Agreement”). Notwithstanding the refusal of Mr. Ding and Mrs. Huang to sign the non-disclosure and standstill agreement, the Independent Committee requested that Mr. Ding and Mrs. Huang obtain their approval before adding additional members to the consortium. Before the additional members were added to the group, Mrs. Huang had two conversations during the first week of August with the Independent Committee chairman, Samuel Yen, to inform him that they intended to have additional members join the consortium. The Independent Committee determined at that time that it would not object to such additions because the desire by Mr. Ding

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and Mrs. Huang, being the initial members of the Original Buyer Group and two of the Company’s longest serving executive officers, to include certain other members of management and long-term shareholders into their consortium would not materially alter the Company’s situation and that, given the Independent Committee’s determination mentioned above that the June 20 Proposal was a credible proposal and potentially advantageous to the Company’s unaffiliated shareholders and ADS holders, it was appropriate to continue negotiations with the expanded Original Buyer Group.

On August 20, 2013, each of Mr. Ding and Mrs. Huang filed with the SEC Amendment No. 1 to Schedule 13D in connection with their entry into the Consortium Agreement.

On the same day, representatives from Houlihan Lokey held a telephonic meeting with representatives from McGraw-Hill Education to discuss (i) McGraw-Hill Education’s view that the June 20 Proposal undervalued the Company, and (ii) negotiations between representatives of McGraw-Hill Education and representatives of the Original Buyer Group concerning the June 20 Proposal. During such discussions, McGraw-Hill Education indicated that it did not want to sell its Shares and ADSs on the terms of the June 20 Proposal, and that it preferred to roll over its Shares in the Merger and remain a shareholder of the Company following the Merger, subject to agreement being reached on the post-Merger ownership of the Company by McGraw-Hill Education and the other members of the Original Buyer Group. McGraw-Hill Education noted that such discussions had not yet produced a mutually satisfactory outcome to date. At such meeting, representatives of Houlihan Lokey also noted that if McGraw-Hill Education had an alternative proposal to offer, the Independent Committee encouraged them to submit it for the Independent Committee’s consideration.

On August 22, 2013, the chairman of the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey, with representatives from the Original Buyer Group joining for a portion of the call, to discuss (i) the Original Buyer Group’s entry into the Consortium Agreement; (ii) the Original Buyer Group’s progress in negotiating debt financing for the proposed transaction; (iii) Houlihan Lokey’s discussions with McGraw-Hill Education on August 20, 2013; (iv) methods for protecting minority shareholder interests in the event McGraw-Hill Education might present a competing alternative to that proposed by the Original Buyer Group, including requiring a “majority-of-the-minority” vote by shareholders unaffiliated with the Original Buyer Group in order to approve any take private transaction sponsored by the Original Buyer Group; and (v) the advisability of delaying the market check process pending the outcome of negotiations between McGraw-Hill Education and the Original Buyer Group. Following discussion with representatives of Ropes & Gray and Houlihan Lokey, the Independent Committee decided not to initiate a market check at this stage of the negotiations given (i) the Original Buyer Group’s beneficial ownership of approximately 43.7% of the total outstanding shares of the Company (as of August 20, 2013) and its consequent ability to block a competing transaction under Cayman Islands law, which requires approval of a merger transaction by two-thirds of the Shares voting in person or by proxy, by voting against it; (ii) the Original Buyer Group’s position that it would not consider any transaction other than the proposed take private transaction; (iii) the Original Buyer Group’s ongoing negotiations with McGraw-Hill Education, and (iv) the determination by the Independent Committee to insist upon the right to terminate any definitive merger agreement that the Company entered into with the Original Buyer Group or its affiliates in order to accept a superior proposal. The Independent Committee also discussed that there was a risk that third parties could use a market check process simply to get access to the Company’s confidential information for their own commercial motives.

On the same day, representatives from McGraw-Hill Education convened a telephonic meeting with Mr. Ding and Mrs. Huang to discuss (i) the take private transaction, (ii) that McGraw-Hill Education did not want to sell its Shares on the terms of the June 20 Proposal and (iii) that McGraw-Hill Education preferred to roll over its Shares in the Merger and remain a shareholder of the Company following the Merger. No agreement was reached by Mr. Ding and Mrs. Huang and McGraw-Hill Education with respect to these matters during the meeting, but Mr. Ding and Mrs. Huang indicated that they would provide McGraw-Hill Education with a proposal for the portion of the Shares held by McGraw-Hill Education that could be rolled over prior to their next telephonic meeting.

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On August 23, 2013, McGraw-Hill Education and its affiliates jointly filed with the SEC a Schedule 13D, which disclosed their shareholdings of the Company at approximately 9.2% of the Company’s total outstanding Shares and summarized the content of the letter, dated July 3, 2013, that McGraw-Hill Education had sent to the Company expressing McGraw-Hill Education’s opinion of the June 20 Proposal.

On August 30, 2013, Mr. Ding and Mrs. Huang convened a telephonic meeting with representatives from McGraw-Hill Education to discuss (i) the take private transaction, (ii) the Original Buyer Group’s proposal for a rollover of the Shares held by McGraw-Hill Education and (iii) other potential opportunities involving the Company and McGraw-Hill Education. During the discussion, Mr. Ding, Mrs. Huang and representatives from McGraw-Hill Education discussed in general terms the possibility of using the Company’s technology in markets outside of Asia served by McGraw-Hill Education and partnership opportunities between McGraw-Hill Education and the Company. During the meeting, Mr. Ding and Mrs. Huang indicated that the Original Buyer Group would agree to permit McGraw-Hill Education to roll over 30% of the Shares owned by McGraw-Hill Education prior to the June 20 Proposal, or 1,013,201 Shares. No agreement was reached by Mr. Ding and Mrs. Huang and McGraw-Hill Education with respect to these matters at this meeting.

On September 2, 2013, Mrs. Huang provided representatives from McGraw-Hill Education with a written summary of the Original Buyer Group’s proposal for the rollover of the Shares held by McGraw-Hill Education. There was no change to such rollover proposal for McGraw-Hill Education between the two meetings on August 30 and September 2.

On the same day, representatives from McGraw-Hill Education convened a telephonic meeting with representatives from Houlihan Lokey to discuss (i) the take private transaction, (ii) the process and timing for the take private transaction and (iii) the status of the negotiations between McGraw-Hill Education and the Original Buyer Group.

On September 5, 2013, Loeb & Loeb on behalf of the Original Buyer Group circulated initial drafts of the Transaction Documents to Ropes & Gray. On the same day, Loeb & Loeb contacted Ropes & Gray to convey a request from the Original Buyer Group that the board of directors and the Independent Committee consider adopting a shareholders’ rights plan to ensure that any acquisition of the Company is negotiated with the Independent Committee. Over the next several days, Ropes & Gray held various discussions with Loeb & Loeb, the Independent Committee and Maples and Calder, Cayman Islands legal counsel to the Independent Committee (“Maples”), regarding the possible terms of a shareholders’ rights plan and fiduciary duty principles under Cayman Islands law.

On September 12, 2013, Ropes & Gray sent to the Independent Committee a list of key issues in the initial drafts of the Transaction Documents received from the Original Buyer Group.

On the same day, representatives from McGraw-Hill Education met with Mr. Ding and Mrs. Huang to discuss (i) McGraw-Hill Education’s proposal for a rollover of its Shares and (ii) potential governance rights for McGraw-Hill Education in the Company following the Merger. During this meeting, McGraw-Hill Education proposed that it (i) roll over 100% of the Shares held by it (including any Shares acquired after the announcement of the June 20 Proposal) and make an equity investment in the Company such that McGraw-Hill Education would own 40% of the surviving company following the Merger, (ii) have the right to nominate a specified number of directors to the board of directors of the surviving company and (iii) receive protective rights customary for a significant minority shareholder, including approval, anti-dilution, exit and information rights. No agreement was reached by Mr. Ding and Mrs. Huang and McGraw-Hill Education with respect to these matters at this meeting.

On September 13, 2013, the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss (i) the recent high trading volume and rise in the price of the Company’s ADSs; (ii) the request from the Original Buyer Group that the Independent Committee authorize the adoption of a shareholders’ rights plan to ensure that any acquisition of the Company is negotiated with the Independent Committee; and (iii) key issues from the initial drafts of the Transaction Documents received from the Original Buyer Group. The Independent Committee agreed that it would closely monitor the trading activity in the Company’s ADSs and gather more information in order to assess whether it should authorize the adoption of a shareholders’ rights plan.

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On the same day, McGraw-Hill Education and its affiliates jointly filed with the SEC Amendment No. 1 to Schedule 13D, which indicated that McGraw-Hill Education and its affiliates had purchased additional ADSs of the Company to increase their shareholdings to approximately 12.0% of the Company’s total outstanding Shares.

On September 16, 2013, representatives from Houlihan Lokey held a telephonic meeting with representatives from McGraw-Hill Education to discuss McGraw-Hill Education’s negotiations concerning the June 20 Proposal with representatives of the Original Buyer Group, which McGraw-Hill Education indicated had not yet produced an outcome satisfactory to McGraw-Hill Education. McGraw-Hill Education also confirmed that it had been purchasing the Company’s ADSs on the open market and intended to continue to make such purchases at the prevailing prices.

On September 17, 2013, the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss (i) Houlihan Lokey’s discussions with McGraw-Hill Education on September 16, 2013; and (ii) the request from the Original Buyer Group that the Independent Committee authorize the adoption of a shareholders’ rights plan to ensure that any acquisition of the Company is negotiated with the Independent Committee. The Independent Committee engaged in an extended discussion with representatives of Ropes & Gray and Houlihan Lokey on the adoption of a shareholders’ rights plan, including (i) the unusually high level of trading activity in the Company’s ADSs; (ii) the confirmation from McGraw-Hill Education in its amended 13D filing on September 13, 2013 and during its telephonic meeting with representatives of Houlihan Lokey on September 16, 2013 that it had been purchasing the Company’s ADSs on the open market and would continue to make such purchases at prevailing market prices; (iii) possible actions that McGraw-Hill Education or other third parties could undertake to effect a take-over bid for the Company without negotiating with the Independent Committee; (iv) the effects of adopting a shareholders’ rights plan; (v) the appropriate trigger threshold and other terms of a shareholders’ rights plan; and (vi) the importance of adopting a rights plan that is controlled and administered by the Independent Committee. Houlihan Lokey informed the Independent Committee that it was highly likely that McGraw-Hill Education’s buying activity accounted for a large portion of the higher than usual trading volume in the Company’s ADSs in recent days. Representatives from Ropes & Gray also noted that they had been in discussions with Maples, regarding fiduciary duty considerations in connection with the proposed shareholders’ rights plan and discussed such considerations with the members of the Independent Committee. After discussion and due consideration, the Independent Committee resolved to recommend that the Company’s board of directors adopt a shareholders’ rights plan to be administered by the Independent Committee.

Also on September 17, 2013, the board of directors of the Company authorized the adoption of a shareholders’ rights plan to ensure that all shareholders of the Company are treated equally and fairly in connection with any take-over bid for the Company. On the same day, the Company entered into a rights agreement, dated as of September 17, 2013, by and between the Company and The Bank of New York Mellon as rights agent (the “Rights Agreement”) The rights issued to existing shareholders of the Company as of the close of business on September 17, 2013 would, subject to the terms and conditions of the rights plan, become exercisable in the event that (i) any person or group, without the prior approval of the Independent Committee, acquired 20% or more of the Company’s Shares or announced a tender offer which, if consummated, resulted in the ownership of 20% of more of the Company’s Shares, or (ii) a person or group that currently holds 20% or more of the Company’s Shares, without the prior approval of the Independent Committee, acquired additional Shares that would increase such person or group’s beneficial ownership by 0.5% or more of the Shares outstanding at the time.

On September 18, 2013, McGraw-Hill Education and its affiliates jointly filed with the SEC Amendment No. 2 to Schedule 13D, which indicated that McGraw-Hill Education and its affiliates had purchased additional ADSs of the Company to increase their shareholdings to approximately 17.6% of the Company’s total outstanding Shares.

On the same day, the Company issued a press release announcing the adoption of the shareholders’ rights plan and filed with the SEC a Form 6-K and a Form 8-A disclosing the terms of the rights plan and the rights issued to existing shareholders as of the close of business on September 17, 2013.

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Also on September 18, 2013, Ropes & Gray sent to Loeb & Loeb revised drafts of the Transaction Documents reflecting the Independent Committee’s comments.

On September 19, 2013, McGraw-Hill Education and its affiliates jointly filed with the SEC Amendment No. 3 to Schedule 13D to amend certain disclosure in Amendment No. 2 to Schedule 13D. The filing indicated that the shareholdings of McGraw-Hill Education and its affiliates remained at approximately 17.6% of the Company’s total outstanding Shares.

On September 22, 2013, representatives of McGraw-Hill Education convened a telephonic meeting with Mrs. Huang to discuss the possible rollover of the Shares held by McGraw-Hill Education in connection with the take private transaction. Following the conversation, Mrs. Huang provided representatives of McGraw-Hill Education with a revised proposal from the Original Buyer Group for the rollover of the Shares held by McGraw-Hill Education. The Original Buyer Group proposed that (i) McGraw-Hill Education roll over 50% of the Shares owned by McGraw-Hill Education prior to the announcement of the June 20 Proposal and (ii) McGraw-Hill Education would not receive any shareholder rights in Holdings following the Merger.

On September 23, 2013, Loeb & Loeb provided to the Original Buyer Group an issues list based on its review of the revised draft Transaction Documents received from Ropes & Gray.

On September 25, 2013, (i) a representative from Shearman & Sterling LLP (“Shearman & Sterling”), McGraw-Hill Education’s legal advisor, communicated with a representative of Ropes & Gray regarding the transaction and (ii) representatives of McGraw-Hill Education delivered to Mrs. Huang a revised proposal for the rollover of the Shares held by McGraw-Hill Education and potential governance rights for McGraw-Hill Education in the Company following the Merger.

On October 6, 2013, McGraw-Hill Education shared its analysis of the June 20 Proposal and possible alternatives with Houlihan Lokey in preparation for the meeting with the Independent Committee to be held on October 8, 2013. McGraw-Hill Education highlighted the following as alternatives to the Buyer Group Offer that were potentially available to the Company: (i) the Company could enhance investment returns to shareholders by engaging in (a) a regular cash dividend, (b) a one-time special cash dividend or (c) a Dutch auction tender offer at a premium to the Company Share price; and (ii) in connection with returning capital to shareholders, the Company could initiate a shareholders relations program to increase investor awareness of the value inherent in the Company. In addition, McGraw-Hill Education provided the following reasons, which were based on publicly available information, for concluding that the June 20 Proposal undervalued the Company: (i) the June 20 Proposal implied a multiple of trailing twelve months EBITDA, as of June 30, 2013, which was below the multiple of the Company’s peers (China Distance Education Holdings Limited, New Oriental Education & Technology Group and TAL Education Group); (ii) it believed that the June 20 Proposal did not reflect the Adjusted EBITDA compound annual growth rate posted by the Company since 2011; (iii) it believed that the June 20 Proposal provided a relatively small premium to the Company’s gross cash value per diluted Share and per diluted ADS, as of the Company’s balance sheet dated June 30, 2013; and (iv) it believed that the June 20 Proposal did not reflect the Company’s track record of Adjusted EBITDA margins and free cash flow conversion and revenue growth between 2007 and 2012. McGraw-Hill Education defined Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization adjusted for one-time, non-recurring items.

On October 7, 2013, representatives from McGraw-Hill Education’s financial advisor convened a telephonic meeting with representatives from Houlihan Lokey to discuss the purpose and goals of the meeting with the Independent Committee to be held on October 8, 2013.

On October 8, 2013, the chairman of the Independent Committee convened a telephonic meeting with representatives from McGraw-Hill Education, Ropes & Gray and Houlihan Lokey. Representatives from McGraw-Hill Education (i) provided an introduction to McGraw-Hill Education and its business, (ii) stated their position that the June 20 Proposal undervalued the Company and that any merger agreement should include certain provisions, including a requirement that any take private transaction be approved by a majority of the shareholders unaffiliated with the Original Buyer Group; (iii) stated that it did not want to sell its Shares on the terms of the June 20 Proposal; (iv) presented several alternative options to a take private transaction, including having the Company declare a regular or special dividend or undertake a Dutch auction

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tender offer; and (v) expressed McGraw-Hill Education’s interest in becoming a potential buyer should the Independent Committee decide to proceed with a take private transaction. In addition, the representatives from McGraw-Hill Education’s financial advisor requested that the Independent Committee provide McGraw-Hill Education with certain additional information about the Company. Following the meeting, the members of the Independent Committee considered the alternative options to a take private transaction presented by McGraw-Hill Education but determined that the effectiveness of these options in producing a sustainable increase in the market value of the Company’s ADSs was likely to be limited. In making such determination, the Independent Committee considered in particular that the Company’s prior share repurchase programs had not significantly improved the pricing or liquidity of the Company’s ADSs in the long-term so it believed that a Company tender offer for a portion of its ADSs would similarly be unable to produce a long-term impact on the Company’s market valuation. The Independent Committee also noted that while a regular or special dividend would provide a way for the Company to return cash to shareholders, the effects of any such dividend on the Company’s valuation may not outweigh the impact of the Company’s projected significant decline in net income over the next several years (see “Special Factors — Certain Financial Projections” below). For both of the foregoing proposals, the Independent Committee also believed that the Company’s ability to operate its business and execute on its strategy could be adversely affected by a reduction in the Company’s cash resources resulting from a tender offer or dividend. The Independent Committee further noted that McGraw-Hill Education failed to propose any alternative merger or buyout proposal of its own despite having been urged to do so by the Independent Committee. Moreover, the Independent Committee considered the points raised by McGraw-Hill Education in support of its conclusion that the June 20 Proposal undervalued the Company, noting that the businesses of the peer companies identified by McGraw-Hill Education differ in a number of respects from that of the Company and they had significantly larger market capitalizations and more liquid trading markets for their shares and so may not be directly comparable to the Company. The Independent Committee also observed that the cash value of the Company cited by McGraw-Hill Education was a gross number that did not take into account the Company’s outstanding short- and long-term loans and it therefore was not necessarily reflective of the value of the Company. The Independent Committee determined that it would further consider the fairness of the offer price taking into consideration the overall terms of the transaction and Houlihan Lokey’s ability to deliver a fairness opinion.

On the same day, Mr. Ding and Mrs. Huang convened a telephonic meeting with representatives from McGraw-Hill Education’s financial advisor to discuss (i) the proposed take private transaction and (ii) McGraw-Hill Education’s potential participation as a member of the Original Buyer Group in such transaction. Mr. Ding and Mrs. Huang and representatives from McGraw-Hill Education’s financial advisor did not discuss a specific proposal in regards to McGraw-Hill Education rolling over its shares. Mr. Ding and Mrs. Huang and representatives from McGraw-Hill Education’s financial advisor agreed that they would reconvene in several days to discuss further.

On October 14, 2013, Mr. Ding and Mrs. Huang reconvened a telephonic meeting with representatives from McGraw-Hill Education’s financial advisor to continue the discussion from the October 8, 2013 meeting. During the meeting, representatives from McGraw-Hill Education’s financial advisor again expressed McGraw-Hill Education’s willingness to make an equity investment in the Company in addition to rolling over its shares. Mr. Ding and Mrs. Huang rejected the equity investment offer and McGraw-Hill Education’s proposal to roll over 100% of McGraw-Hill Education’s Shares (including any Shares acquired after the announcement of the June 20 Proposal). No agreement was reached by Mr. Ding and Mrs. Huang and representatives from McGraw-Hill Education’s financial advisor with respect to these matters at this meeting.

On the same day, the Company provided financial projections to Houlihan Lokey, which reflected the Company’s actual results of operations for the second quarter of 2013 and projected results of operations for the second half of 2013 and for the full years from 2014 to 2017.

On October 15, 2013, Ropes & Gray received from the Original Buyer Group a draft debt facility agreement between the Original Buyer Group and China Merchants Bank as the lender for the purpose of financing the proposed take private transaction.

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On October 16, 2013, McGraw-Hill Education and its affiliates jointly filed with the SEC Amendment No. 4 to Schedule 13D, which indicated that McGraw-Hill Education and its affiliates had purchased additional ADSs of the Company to increase their shareholdings to approximately 19.0% of the Company’s total outstanding Shares.

On the same day, Ropes & Gray provided Loeb & Loeb with comments on the debt facility agreement between the Original Buyer Group and China Merchants Bank, with the key concerns being the certainty of and conditions to the availability of the debt financing to fund the proposed take private transaction.

On October 17, 2013, Ropes & Gray, a representative of the Original Buyer Group and Loeb & Loeb held a telephonic meeting to discuss Ropes & Gray’s comments to the debt facility agreement.

On October 18, 2013, Ropes & Gray provided Loeb & Loeb with additional comments on the debt facility agreement.

On October 19, 2013, a representative from McGraw-Hill Education’s financial advisor convened a telephonic meeting with representatives from Houlihan Lokey to discuss when McGraw-Hill Education should expect a response to its request for additional information on the Company.

On October 20, 2013, a representative from Shearman & Sterling convened a telephonic meeting with a representative of Ropes & Gray to discuss (i) the potential take private transaction process and (ii) the variable interest entity structure applicable to certain of the Company’s subsidiaries.

On October 21, 2013, the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss (i) McGraw-Hill Education’s request that the Independent Committee act as an intermediary to help McGraw-Hill Education reach an agreement with the Original Buyer Group in relation to the proposed take private transaction; and (ii) McGraw-Hill Education’s request for permission to conduct certain due diligence on the Company. The Independent Committee noted at this time that McGraw-Hill Education had not submitted any alternative acquisition proposal and the focus of its discussions with the Original Buyer Group to date had been on whether McGraw-Hill Education would be allowed to join the Original Buyer Group and, if yes, the number of Shares it could roll over. After the discussion, the Independent Committee determined that (i) it would evaluate any proposals for a transaction involving the Company submitted by McGraw-Hill Education either on its own or jointly with the Original Buyer Group, but that the Independent Committee’s role was not to act as an intermediary to help third parties reach an agreement with the Original Buyer Group; and (ii) it would only consider granting McGraw-Hill Education access to non-public information regarding the Company if McGraw-Hill Education provided a written proposal with specific terms for a transaction with the Company.

On October 25, 2013, Loeb & Loeb sent to Ropes & Gray revised drafts of the Transaction Documents. The revised draft of the Merger Agreement indicated, among other things, that the Original Buyer Group had accepted the Independent Committee’s request that the Merger be approved by a majority of the shareholders unaffiliated with the Buyer Group present and voting in person or by proxy at the extraordinary general meeting.

On the same day, Mr. Ding and Mrs. Huang convened a telephonic meeting with representatives from McGraw-Hill Education’s financial advisor to continue the discussion about McGraw-Hill Education’s potential participation as a member of the Buyer Group in the take private transaction, including the rollover of the Shares held by McGraw-Hill Education and McGraw-Hill Education’s percentage ownership in the Company following the Merger. In addition, Mr. Ding and Mrs. Huang and representatives from McGraw-Hill Education’s financial advisor discussed potential cooperation between the Company and McGraw-Hill Education that could benefit both parties, such as having McGraw-Hill Education sell the Company’s products outside of China and incorporating McGraw-Hill education content in the Company’s online service.

On October 27, 2013, a representative of McGraw-Hill Education’s financial advisor convened a telephonic meeting with a representative of Houlihan Lokey regarding (i) the proposed take private transaction, (ii) the status of McGraw-Hill Education’s request for additional information on the Company and (iii) the procedures to be followed by the Company in the event that McGraw-Hill Education submitted a proposal to acquire the Company. In addition, on the same day, a representative of Shearman & Sterling

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reiterated to a representative of Ropes & Gray that McGraw Hill did not want to sell its Shares on the terms of the June 20 Proposal and that it preferred to roll over its Shares in the Merger and remain a shareholder of the Company following the Merger.

On October 29, 2013, representatives of McGraw-Hill Education’s financial advisor convened a telephonic meeting with representatives of Houlihan Lokey to discuss (i) the Independent Committee’s response to McGraw-Hill Education’s request for additional information, (ii) the Independent Committee’s position that it would not act as an intermediary to help third parties reach private agreements with the Original Buyer Group that did not advance the interests of independent shareholders generally, (iii) the take private transaction and (iv) the alternative options to a take private transaction presented by McGraw-Hill Education on the October 8^th call with the Independent Committee.

On October 30, 2013, representatives of McGraw-Hill Education’s financial advisor convened a telephonic meeting with Mrs. Huang to continue the discussion about McGraw-Hill Education’s potential participation as a member of the Original Buyer Group in the take private transaction. On the same day, representatives of McGraw-Hill Education submitted to Mr. Ding and Mrs. Huang a term sheet outlining McGraw-Hill Education’s rollover of its Shares and governance rights in the Company following the Merger. The McGraw-Hill Education term sheet specified that McGraw-Hill Education would (i) roll over 100% of the Shares held by it (including any Shares acquired after the announcement of the June 20 Proposal) on the same terms as the Original Buyer Group, (ii) have the right to nominate a specified number of directors to the board of directors of the new company and (iii) receive protective rights customary for a significant minority shareholder, including approval, anti-dilution, exit and information rights. No agreement was reached by Mr. Ding and Mrs. Huang and representatives from McGraw-Hill Education’s financial advisor with respect to these matters at the meeting.

On October 31, 2013, Ropes & Gray sent to the Independent Committee a list of key outstanding issues in the latest drafts of the Transaction Documents received from the Original Buyer Group.

On the same day, the chairman of the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss the certain outstanding issues in the Transaction Documents.

On November 4, 2013, Mrs. Huang responded to McGraw-Hill Education’s term sheet by informing representatives of McGraw-Hill Education that no shareholder rolling over Shares in the take private transaction would be receiving any specific governance rights in the Company following the Merger. In addition, Mrs. Huang indicated that the Original Buyer Group would consider permitting McGraw-Hill Education to roll over 80% of the Shares owned by it prior to the announcement of the June 20 Proposal.

On November 5, 2013, Ropes & Gray and Loeb & Loeb held a telephonic meeting to discuss certain outstanding issues in the Transaction Documents.

On the same day, Ropes & Gray received a revised draft of the debt facility agreement from Loeb & Loeb and communicated its comments on the agreement to a representative of the Original Buyer Group and Loeb & Loeb.

On November 6, 2013, Ropes & Gray and Eversheds International (“Eversheds”), legal counsel to China Merchants Bank, convened a telephonic meeting to discuss Ropes & Gray’s comments to the debt facility agreement, including the certainty of and conditions to the availability of the debt financing.

On November 7, 2013, the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray, Houlihan Lokey and Maples to discuss (i) the key outstanding issues in the Transaction Documents; (ii) the key outstanding issues in the debt facility agreement between the Original Buyer Group and China Merchants Bank; (iii) the negotiation process with the Original Buyer Group on the price for the proposed transaction; (iv) Houlihan Lokey’s progress on its preliminary financial analyses of the Company; and (v) the Independent Committee’s fiduciary duties under Cayman law. Ropes & Gray highlighted to the Independent Committee that the Original Buyer Group had to date accepted most of the Independent Committee’s comments to the Transaction Documents. Representatives of Houlihan Lokey then reviewed and discussed with the Independent Committee certain market data regarding the Company and the proposed

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transaction as well as the financial projections provided by the Company’s management on October 14, 2013, including key revenue and expense assumptions and projected performance as compared to historical performance. Houlihan Lokey did not present a preliminary valuation analysis to the Independent Committee at this meeting. In addition, after engaging in a discussion on whether $2.33 per Share (or $7.00 per ADS) was the highest price the Original Buyer Group was willing to pay, the Independent Committee determined that, while the Independent Committee may in the future be in a position to conclude that such offer price is fair to the Company’s unaffiliated shareholders and ADS holders depending on the final terms of the Transaction Documents and Houlihan Lokey’s ability to deliver a fairness opinion with respect to such offer price, it would be appropriate to instruct Houlihan Lokey to seek an increase in the proposed merger consideration from the Original Buyer Group on its behalf in order to determine if a higher price is possible. The Independent Committee also discussed the fact that McGraw-Hill Education had not submitted any alternative acquisition proposals and seemed unlikely to do so given that its discussions with the Original Buyer Group continued to focus primarily on securing an opportunity for McGraw-Hill Education to join the Original Buyer Group to pursue the June 20 Proposal.

In determining whether or not to submit an alternative acquisition proposal, McGraw-Hill Education considered the following factors: (i) the fact that the Original Buyer Group beneficially owned approximately 43.7% of the total outstanding shares of the Company (as of August 20, 2013) and its consequent ability to block a competing transaction under Cayman Islands law, which requires approval of a merger transaction by two-thirds of the Shares voting in person or by proxy, by voting against it, (ii) that the current management team may not remain with the Company if the transaction contemplated by the June 20 Proposal were not consummated and (iii) the difficulty of operating the Company as a foreign investor without the support of the current Company management team. Based on the foregoing factors and its desire to maintain its equity stake in the Company, McGraw-Hill concluded that it needed to reach an agreement with the Original Buyer Group because submitting an alternative acquisition proposal was not a viable option.

On November 8, 2013, representatives of McGraw-Hill Education convened a telephonic meeting with Mrs. Huang to discuss McGraw-Hill Education’s term sheet for the rollover of its Shares and McGraw-Hill Education receiving board representation in the Surviving Corporation following the Merger. McGraw-Hill Education’s proposal consisted of two primary terms: (i) McGraw-Hill Education rolling over 100% of its Shares, excluding all of the Shares McGraw-Hill Education acquired after the announcement of the June 20 Proposal, on the same terms as the Original Buyer Group; and (ii) the right to nominate a specified number of directors to the board of directors of Holdings and each committee thereof, if any, in proportion to McGraw-Hill Education’s equity ownership in Holdings following the proposed merger. McGraw-Hill Education’s proposal was subject to the Original Buyer Group providing McGraw-Hill Education with certain transaction related information.

On November 12, 2013, Mrs. Huang responded by providing McGraw-Hill Education with a revised term sheet for the rollover of McGraw-Hill Education’s Shares and McGraw-Hill Education receiving board representation in the Surviving Corporation following the Merger. The revised term sheet (i) identified McGraw-Hill Education’s ownership percentage in Holdings following Merger on a fully-diluted basis assuming a 100% rollover of management and staff options, (ii) deleted McGraw-Hill Education’s anti-dilution rights and (iii) revised the board representation provision to exclude independent directors when calculating the proportionate number of directors nominated by McGraw-Hill Education.

On November 13, 2013, representatives of Houlihan Lokey held a telephonic meeting with representatives of the Original Buyer Group to (i) discuss the Original Buyer Group’s progress in its negotiations with McGraw-Hill Education in relation to the proposed transaction, and (ii) convey the Independent Committee’s request that the Original Buyer Group raise its offer price for the proposed transaction, although the precise amount or range of such an increase was not specified. Representatives of the Buyer Group indicated that they were unwilling to increase the offer price above $2.33 per Share, or $7.00 per ADS, given (a) the continuous efforts made by Company management to increase shareholder value in the past several years had not resulted in sustainable increases to the market value of the Company’s ADSs (see discussion under the caption “Special Factors — Position of the Buyer Group as to Fairness of the Merger” on page 45), and (b) the Original Buyer Group’s offer price represented a premium to both the price of prior ADS repurchases by the Company and to the trading price of the ADSs prior to the June 20 Proposal.

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On the same day, representatives of the Original Buyer Group indicated to the Independent Committee that it had reached a tentative agreement with McGraw-Hill Education for McGraw-Hill Education to roll over 3,377,336 Shares, which represented all of the Shares held by it prior to the announcement of the June 20 Proposal, and to cash out in the proposed Merger the 1,392,900 Shares acquired after the June 20 Proposal on the same terms offered to the Company’s unaffiliated shareholders, subject to agreement being reached on the terms of the rollover and the governance of the Company after the Merger. In exchange for the sale of the 1,392,900 Shares, represented by 464,300 ADSs, McGraw-Hill Education will receive a cash payment of $3,250,100. The Original Buyer Group negotiated for the exclusion from McGraw-Hill Education’s rollover the Shares acquired by McGraw-Hill Education after the June 20 Proposal because the members of the Original Buyer Group had refrained from purchasing in the open market any Shares of the Company following the June 20 Proposal. The representatives of the Original Buyer Group asked the Independent Committee to authorize McGraw-Hill Education and certain other shareholders of the Company to join the Original Buyer Group.

On November 18, 2013, a representative from the Original Buyer Group provided representatives of McGraw-Hill Education with copies of the latest drafts of the Transactions Documents.

On November 19, 2013, Ropes & Gray received revised drafts of the Transaction Documents from Loeb & Loeb.

On or about the same day, Ropes & Gray, a representative of the Original Buyer Group and Eversheds convened a telephonic meeting to discuss outstanding issues in the debt facility agreement. In addition, a representative of Houlihan Lokey convened a telephonic meeting with a representative from McGraw-Hill Education’s financial advisor to discuss the status of negotiations between Mr. Ding and Mrs. Huang and McGraw-Hill Education.

On November 20, 2013, the Independent Committee signed a written consent to amend the shareholders’ rights plan in order to waive the activation of the shareholders’ rights plan in relation to the expansion of the Original Buyer Group to include McGraw-Hill Education, Weblearning and Mr. Guo Young (Mr. Guo Young together with McGraw-Hill Education and Weblearning, the “Additional Buyer Group Members”). In July 2013, Mr. Ding and Mrs. Huang contacted Weblearning to join the Original Buyer Group. Weblearning did not confirm its willingness to join the Original Buyer Group until early November. The beneficial shareholder of Weblearning is Mr. Xueshan Yang, who is a PRC citizen and a seed investor of the Company.

On November 21, 2013, representatives of the Original Buyer Group provided representatives of Shearman & Sterling with a draft of the First Amendment to the Consortium Agreement.

Between November 21, 2013 and December 4, 2013, representatives of the Original Buyer Group and representatives of McGraw-Hill Education negotiated certain provisions in the First Amendment to the Consortium Agreement and the Transaction Documents related to McGraw-Hill Education rolling over its Shares in connection with the take private transaction.

On November 24, 2013, Ropes & Gray received from the Original Buyer Group a revised draft of the debt facility agreement between the Original Buyer Group and China Merchants Bank.

On November 25, 2013, Ropes & Gray provided Eversheds with comments on the debt facility agreement and held a telephonic meeting to discuss the certainty of and conditions to the availability of the debt financing.

On November 26, 2013, Ropes & Gray received from the Original Buyer Group a further revised draft of the debt facility agreement.

On November 28, 2013, Ropes & Gray provided Eversheds with comments on the revised debt facility agreement and held a telephonic meeting to discuss the certainty of and conditions to the availability of the debt financing.

From November 28, 2013 to December 5, 2013, Shearman & Sterling and Loeb & Loeb negotiated an amendment to the Consortium Agreement along with a shareholders agreement governing the rights of the members of the Original Buyer Group and Additional Buyer Group Members in the governance of the

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surviving company after the effective time of the Merger. The negotiated amendment to the Consortium Agreement and the shareholders agreement would each provide McGraw-Hill Education the right to designate a number of directors to the board of directors of each of Holdings and the surviving company, and, in each case, each committee thereof, if any, as is proportionate to McGraw-Hill Education’s equity ownership in Holding following the closing of the Merger. Other than board representation, McGraw-Hill Education did not receive any additional shareholder rights in Holdings following the Merger.

On December 3 and 4, 2013, Ropes & Gray, a representative of the Original Buyer Group and Loeb & Loeb convened further telephonic meetings to discuss the certainty of and conditions to the availability of the debt financing.

On December 5, 2013, Mrs. Huang, Mr. Ding, South Lead Technology Limited, Moral Known Industrial Limited, InterVision Technology Ltd., Lingyuan Furong Investment Mgmt Co., Ltd., MLP Holdings Limited, New Value Technology Limited, Ms. Ellen Huang, Mr. Gegeng Tana, Mr. Mei Yixin, Mr. Pan Zhixin, Mr. Guo Young, McGraw-Hill Education and Weblearning entered into the First Amendment to the Consortium Agreement to work with each other on an exclusive basis to pursue a potential take private transaction with the Company, subject to the terms and conditions contained therein (the “First Amendment to the Consortium Agreement ”). In addition, the First Amendment to the Consortium Agreement provided that, promptly following the closing of the Merger, McGraw-Hill Education would have the right to designate a number of directors to the board of directors of each of Holdings and the surviving company, and, in each case, each committee thereof, if any, as is proportionate to McGraw-Hill Education’s equity ownership in Holdings.

On December 6, 2013, the Company and The Bank of New York Mellon, as rights agent, entered into an amendment to the Rights Agreement to change the definition of “Management Group” in the Rights Agreement to cover additional shareholders that joined the Buyer Group, including McGraw-Hill Education, Weblearning Company Limited and Mr. Guo Young.

On the same day, each of Mr. Ding and Mrs. Huang filed with the SEC Amendment No. 2 to Schedule 13D and McGraw-Hill Education and its affiliates jointly filed with the SEC Amendment No. 5 to Schedule 13D in connection with their entry into the First Amendment to the Consortium Agreement.

On the same day, Ropes & Gray sent revised drafts of the Transaction Documents to Loeb & Loeb.

On December 10, 2013, the chairman of the Independent Committee convened a telephonic meeting with representatives from Ropes & Gray and Houlihan Lokey to discuss (i) the Buyer Group’s progress in securing debt financing for the proposed transaction; (ii) the status of the Transaction Documents; (iii) Houlihan Lokey’s progress on its preliminary financial analyses of the Company; and (iv) negotiations with the Buyer Group on the price for the proposed transaction. Representatives from Houlihan Lokey indicated that representatives of the Buyer Group had stated that they were unwilling to increase the offer price above $2.33 per Share, or $7.00 per ADS. Houlihan Lokey noted that it had held four meetings with representatives of the Buyer Group since November 7, 2013 to discuss an increase in the offer price and that, at each such meeting, back-and-forth discussions ensued with Houlihan Lokey emphasizing that the Independent Committee desired to see an increase in the offer price and the Buyer Group reiterating its position that it could not increase the price for the reasons discussed at the Independent Committee’s meeting held on November 13, 2013. The Independent Committee then discussed the fact that when the Independent Committee instructed Houlihan Lokey to seek an increase in the proposed merger consideration, it was doing so as part of its efforts, in the exercise of its fiduciary duties, to attempt to obtain the best possible terms for the benefit of the Company’s unaffiliated shareholders and ADS holders and not because it believed such consideration was per se inadequate and unfair. The Independent Committee concluded that, although it had been unable to negotiate a higher offer price with the Buyer Group, it might nonetheless be in a position to determine such offer price is fair to unaffiliated shareholders and ADS holders provided that Houlihan Lokey would deliver a fairness opinion with respect to such offer price and the other terms of the Transaction Documents would be satisfactory to the Independent Committee.

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On December 11, 2013, Loeb & Loeb sent revised drafts of the Transaction Documents to Ropes & Gray. On December 12 and 13, Ropes & Gray provided Loeb & Loeb with additional comments on the Transaction Documents.

On the same day, the Company provided updated financial projections to Houlihan Lokey, which reflected the Company’s actual results of operations for the third quarter of 2013. In these updated projections, the Company made immaterial revisions to the previously estimated full year 2013 results of operations to reflect its actual results of operations for the first three quarters of the year and management’s better visibility into full year results with the end of the year approaching. Additionally, the Company made immaterial updates to the projected results of operations for 2014 to 2017 to account for better business performance through the first three quarters of 2013 that were expected to carry through to future periods.

Between December 12 and December 23, 2013, Ropes & Gray held further discussions with Eversheds and a representative of the Buyer Group to finalize the terms of the debt facility agreement.

On December 17, 2013, Loeb & Loeb sent revised drafts of the Transaction Documents to Ropes & Gray. Between December 17, 2013 and December 26, 2013, Ropes & Gray, Loeb & Loeb and a representative of the Buyer Group continued to negotiate with respect to the terms of the Transaction Documents. On December 26, 2013, Ropes & Gray sent Loeb & Loeb and a representative of the Buyer Group revised drafts of the Transaction Documents.

On December 24, 2013, Holdings, Merger Sub, South Lead Technology Limited, Moral Known Industrial Limited, Shawn Ding, Julia Huang and China Merchants Bank entered into a US$30.0 million facility agreement to be used to finance the Merger and the related transactions and the payment of associated fees, costs and expenses.

On December 30, 2013, a telephonic meeting of the entire Independent Committee was held with representatives from Ropes & Gray, Houlihan Lokey and Maples. At the meeting, Mr. Samuel Yen, Mr. Min Fan and Mr. Tianwen Liu disclosed their interests in the proposed transaction, which interests are described under the heading titled “— Interests of Certain Persons in the Merger.” The chairman of the Independent Committee provided an update on the negotiations with the Buyer Group and the resolutions of the open issues in the Transaction Documents. Specifically, the chairman of the Independent Committee noted that the proposed transaction would be subject to a “majority of the minority” vote requirement by shareholders unaffiliated with the Buyer Group. Representatives of Houlihan Lokey then reviewed and discussed with the Independent Committee its financial analyses with respect to the Company and the transaction proposed by the Buyer Group to acquire the Shares and ADSs (other than the Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) at a purchase price of $2.33 per Share or $7.00 per ADS. At the request of the Independent Committee, Houlihan Lokey then rendered its oral opinion to the Independent Committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion to the Independent Committee dated December 30, 2013) to the effect that, as of December 30, 2013, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) was fair, from a financial point of view, to such holders. Please see “— Opinion of Houlihan Lokey, the Independent Committee’s Financial Advisor” beginning on page 51 for additional information regarding the financial analyses performed by Houlihan Lokey and the opinion rendered by Houlihan Lokey to the Independent Committee. A representative from Maples then made a presentation to the Independent Committee regarding the directors' fiduciary duties under Cayman Islands law and a representative from Ropes & Gray summarized the major terms of the Transaction Documents. Following a comprehensive and detailed discussion of the terms of the Transaction Documents, Houlihan Lokey’s financial presentation and fairness opinion, as well as a variety of potential positive and negative factors with respect to the Merger, the Independent Committee unanimously resolved to recommend that the board of directors of the Company approve the Transaction Documents and the transactions contemplated thereby, including the Merger.

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Following the meeting of the Independent Committee, based upon the unanimous recommendation of the Independent Committee, our board of directors on the same date adopted resolutions approving the terms of the Transaction Documents and the transactions contemplated thereby, including the Merger, and adopted resolutions recommending that the Company’s shareholders vote for the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger.

Late on December 31, 2013, the Company, Holdings and Merger Sub executed the Merger Agreement and the Company issued a press release announcing the execution of the Merger Agreement. Simultaneously, the Voting Agreement and the Contribution Agreement were executed by the parties thereto.

On the same day, Holdings, Shawn Ding, Moral Known Industrial Limited, Julia Huang, South Lead Technology Limited, Gegeng Tana, Mei Yixin, Pan Zhixin, Ellen Huang, InterVision Technology Ltd., MLP Holdings Limited, New Value Technology Limited, Lingyuan Furong Investment Mgmt Co., Ltd., McGraw-Hill Education, Weblearning and Guo Young entered into a shareholders agreement (the “Shareholders Agreement”) that provides for, after the effective time of the Merger, (i) McGraw-Hill Education’s right to designate one or more directors (rounded to the nearest whole number) to the board of directors of each of Holdings and the Surviving Corporation, and, in each case, each committee thereof, if any, as is proportionate to McGraw-Hill Education’s equity ownership in Holdings and (ii) the adoption of an equity incentive plan for Holdings with substantially the same terms as those provided under the Company Plan. Other than board representation, neither the Shareholders Agreement nor the First Amendment to the Consortium Agreement provided McGraw-Hill Education with any additional shareholder rights in Holdings following the Merger.

Mr. Ding and Mrs. Huang and the representatives of McGraw-Hill Education did not engage in any discussions regarding strategic opportunities involving the Company and McGraw-Hill Education besides those discussions referred to above, and none of McGraw-Hill Education, the Buyers Group or the Company have agreed to undertake any strategic opportunities involving McGraw-Hill Education, Holdings or the surviving company following the closing of the Merger.

Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors

Our board of directors, acting upon the unanimous recommendation of the Independent Committee, which Independent Committee acted with the advice and assistance of its financial and legal advisors, evaluated the Merger, including the terms and conditions of the Merger Agreement.

At a meeting on December 30, 2013, the Independent Committee unanimously recommended that our board of directors adopt resolutions that:

On December 30, 2013, our board of directors approved the resolutions recommended by the Independent Committee.

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In the course of reaching their respective determinations, the Independent Committee and our board of directors considered the following substantive factors and potential benefits of the Merger, each of which the Independent Committee and our board of directors believed supported their respective decisions, but which are not listed in any relative order of importance:

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While the Merger is not structured so that approval of a majority of unaffiliated security holders is required in order to approve the Merger, as noted above one of the votes required under the Merger Agreement takes into account only the votes cast by the shareholders other than the Rollover Shareholders, which encompasses the Company’s unaffiliated shareholders and ADS holders and officers and directors who are not Rollover Shareholders, each of whom will receive the $2.33 per Share, or $7.00 per ADS, merger consideration for each Share or ADS that they hold on the effective date of the Merger. As the Company’s officers and directors who are non-Rollover Shareholders did not hold any Shares or ADSs as of December 31, 2013 (and as of the date of this proxy statement) and had stock options exercisable within 60 days of such dates for an aggregate of approximately 2.3% of the Company’s total outstanding Shares, the Independent Committee and our board of directors determined that such voting requirement provides a meaningful procedural safeguard since the Company’s unaffiliated shareholders are able to vote to reject the Merger Agreement and the transactions contemplated thereby at the extraordinary general meeting. Thus, for this and the other reasons stated above, the Independent Committee and our board of directors believe that the Merger is procedurally fair to the Company’s unaffiliated shareholders and ADS holders. The aggregate number of Shares entitled to vote at the extraordinary general meeting by category, consisting of Rollover Shareholders, unaffiliated shareholders and officers and directors who are not Rollover Shareholders, is set forth below:

Category of Shareholders		Shares Entitled to Vote(1)				Percentage(2)
Rollover Shareholders			14,125,801				54.9	%
Unaffiliated Shareholders			11,623,107				45.1	%
Officers and Directors who are not Rollover Shareholders			—				—
Total			25,748,908				100.0%

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The Independent Committee and the board of directors also considered a variety of potentially negative factors discussed below concerning the Merger Agreement and the Merger, which are not listed in any relative order of importance:

The foregoing discussion of information and factors considered by the Independent Committee and our board of directors is not intended to be exhaustive, but includes the material factors considered by the Independent Committee and our board of directors. In view of the wide variety of factors considered by the Independent Committee and our board of directors, neither the Independent Committee nor our board of directors found it practicable to quantify or otherwise assign relative weights to the foregoing factors in

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reaching its conclusions. In addition, individual members of the Independent Committee and our board of directors may have given different weights to different factors and may have viewed some factors more positively or negatively than others. The Independent Committee recommended that our board of directors approve, and our board of directors approved, the Merger Agreement based upon the totality of the information presented to and considered by it.

Neither the Independent Committee nor our board of directors considered the liquidation value of Company’s assets because each considers the Company to be a viable going concern business where value is derived from cash flows generated from its continuing operations. In addition, the Independent Committee and the board of directors believe that the value of the Company’s assets that might be realized in a liquidation would be significantly less than its going concern value. The Independent Committee and the Company’s board of directors considered the weighted-average purchase price per ADS of approximately $1.89 that the Company paid for repurchases made pursuant to the Company’s share repurchase program in 2013, and the weighted-average purchase price per ADS of $1.89 paid by the Buyer Group and their affiliates in connection with their purchases of Shares and ADSs during the past two years, as described under the caption “Transactions in the Shares and ADSs” beginning on page 101. Each of the Independent Committee and the board of directors believes the analyses and additional factors it reviewed provided an indication of our going concern value. Each of the Independent Committee and the board of directors also considered the historical market prices of our ADSs as described under the caption “Market Price of the Company’s ADSs, Dividends and Other Matters — Market Price of the ADSs” beginning on page 75.

Neither the Independent Committee nor the Company’s board of directors considered the Company’s net book value, which is defined as total assets minus total liabilities, attributable to the shareholders of the Company as a factor. The Independent Committee and the Company’s board of directors believe that net book value is not a material indicator of the value of the Company as a going concern. The Company’s net book value as of December 31, 2012 was $136.0 million. Net book value does not take into account the future prospects of the Company, market conditions, trends in the Chinese online educational services industry, or the business risks inherent in competing with larger companies in that industry. The Independent Committee and the Company’s board of directors are not aware of, and thus did not consider, any offers or proposals made by any unaffiliated person during the past two years for (a) a merger or consolidation of the Company with another company, (b) the sale or transfer of all or substantially all of the Company’s assets or (c) the purchase of all or a substantial portion of the Shares that would enable such person to exercise control of or significant influence over the Company.

In reaching its determination that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the Company and our unaffiliated shareholders and ADS holders and its decision to approve the Merger Agreement and recommend the approval of the Merger Agreement by our shareholders, our board of directors considered the analysis and recommendation of the Independent Committee and the factors examined by the Independent Committee as described above under this section and adopted such recommendations and analysis. For the foregoing reasons, our board of directors believes that the Merger Agreement and the transactions contemplated thereby are substantively and procedurally fair to our unaffiliated shareholders and ADS holders.

Except as discussed in “Special Factors — Background of the Merger,” “Special Factors — Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors,” and “Special Factors — Opinion of the Independent Committee's Financial Advisor,” no director who is not an employee of the Company has retained an unaffiliated representative to act solely on behalf of unaffiliated shareholders and unaffiliated ADS holders for purposes of negotiating the terms of the transaction and/or preparing a report concerning the fairness of the transaction.

Position of the Buyer Group as to the Fairness of the Merger

Under SEC rules governing going private transactions, each member of the Buyer Group is required to express his, her or its belief as to the fairness of the Merger to the unaffiliated shareholders and ADS holders of the Company. Each member of the Buyer Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The Buyer Group does not rely on or adopt the analysis of the Independent Committee or Houlihan Lokey in

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considering the fairness of the Merger to the unaffiliated shareholders and ADS holders of the Company. The views of each member of the Buyer Group as to the fairness of the Merger are not intended to be and should not be construed as a recommendation to any shareholder or ADS holder of the Company as to how that shareholder or ADS holder should vote on the proposal to approve the Merger Agreement and the transactions contemplated thereby, including the Merger. Each member of the Buyer Group has interests in the Merger that are different from, and/or in addition to, those of the other shareholders and ADS holders of the Company by virtue of their continuing interests in the Surviving Corporation after the completion of the Merger. These interests are described under “— Interests of Certain Persons in the Merger — Interests of the Buyer Group” beginning on page 66.

The Buyer Group believes the interests of the Company’s unaffiliated shareholders and ADS holders were represented by the Independent Committee, which negotiated the terms and conditions of the Merger Agreement with the assistance of its independent legal and financial advisors. Each member of the Buyer Group attempted to negotiate a transaction that would be most favorable to it, and not to the Company’s unaffiliated shareholders and ADS holders and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were fair to such holders. The Buyer Group did not participate in the deliberations of the Independent Committee regarding, and did not receive any advice from the Independent Committee’s independent legal or financial advisors as to, the fairness of the Merger to the Company’s unaffiliated shareholders and ADS holders. Furthermore, the members of the Buyer Group did not themselves undertake a formal evaluation of the fairness of the Merger. No financial advisor provided the Buyer Group with any analysis or opinion with respect to the fairness of the merger consideration to the Company’s unaffiliated shareholders and ADS holders.

Based on the Original Buyer Group’s and the Additional Buyer Group Members (other than McGraw-Hill Education) knowledge and analysis of available information regarding the Company, as well as discussions with the Company’s senior management regarding the Company and its business and the factors considered by, and findings of, the Independent Committee and the board of directors of the Company discussed under “ — Reasons for the Merger and Recommendation of the Independent Committee and Our Board of Directors” beginning on page 40, the Original Buyer Group and the Additional Buyer Group Members (other than McGraw-Hill Education) believe that the Merger is substantively fair to the unaffiliated shareholders and ADS holders of the Company based on the following factors, which are not listed in any relative order of importance:

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Based on McGraw-Hill Education’s knowledge and analysis of available information regarding the Company, McGraw-Hill Education believes that the Merger is substantively fair to the unaffiliated shareholders and ADS holders of the Company based on the following factors, which are not listed in any relative order of importance:

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Notwithstanding the immediately foregoing, McGraw-Hill Education has not changed its views that the June 20 Proposal undervalues the Company or from its prior public statements referred to elsewhere in this proxy statement, which views were based on McGraw-Hill Education’s knowledge of the industry in which the Company operates, the Company’s publicly disclosed financial information and precedent transactions.

McGraw-Hill Education did not consider the current or the historical market prices of the Company’s ADSs because it does not believe the trading volume of the ADSs is sufficient to provide an appropriately reliable indication of the value of the Company’s Shares and ADS.

McGraw-Hill Education did not consider the average price per ADS of approximately $7.06 paid by McGraw-Hill Education during the past two years because all of McGraw-Hill Education’s purchases of ADSs in the past two years occurred after the announcement of the June 20 Proposal. McGraw-Hill Education’s purchases of ADSs during the past two years are described under “Transactions in the Shares and ADSs — Purchases by McGraw-Hill Education” beginning on page 101.

The Buyer Group did not consider the liquidation value of the Company because the Buyer Group considers the Company to be a viable going concern and views the trading history of the ADSs as an indication of the Company’s going concern value, and, accordingly, did not believe liquidation value to be relevant to a determination as to the fairness of the Merger.

The Buyer Group did not consider net book value, which is an accounting concept, as a factor, because it believed that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and therefore not a relevant measure in the determination as to the fairness of the Merger.

The Buyer Group did not establish, and did not consider, a going concern value for the Company’s Shares and ADSs as a public company to determine the fairness of the merger consideration to the Company’s unaffiliated shareholders and ADS holders because, following the Merger, the Company will have a significantly different capital structure. However, to the extent the pre-Merger going concern value was reflected in the pre-announcement price of the Company’s ADSs, the merger consideration of $7.00 per ADS represented a premium to the going concern value of the Company.

The Buyer Group is not aware of, and thus did not consider in their fairness determinations, any offers or proposals made by any unaffiliated third parties during the past two years for (a) a Merger or consolidation of the Company with another company, (b) the sale or transfer of all or any substantial part of the Company’s assets or (c) the purchase of all or a substantial portion of the Company’s securities that would enable such person to exercise control of the Company.

The Buyer Group did not receive any independent reports, opinions or appraisals from any third party related to the fairness of the Merger, and thus did not consider any such reports, opinions or appraisals in determining the substantive fairness of the Merger to the unaffiliated shareholders and ADS holders.

The Buyer Group believes that the Merger is procedurally fair to the Company’s unaffiliated shareholders and ADS holders based on the following factors, which are not listed in any relative order of importance:

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As a result of the procedural safeguards described above, the Buyer Group concluded that the Merger is procedurally fair to the unaffiliated shareholders and ADS holders of the Company.

The foregoing is a summary of the information and factors considered and given weight by the Original Buyer Group and the Additional Buyer Group Members in connection with their evaluation of the substantive and procedural fairness of the Merger to the Company’s unaffiliated shareholders and ADS holders, which is

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not intended to be exhaustive, but is believed by the Buyer Group to include all material factors considered by the Original Buyer Group and the Additional Buyer Group Members in their respective determinations. The Buyer Group did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching their respective conclusion as to the fairness of the Merger to the Company’s unaffiliated shareholders and ADS holders. Rather, the Original Buyer Group’s and the Additional Buyer Group Members’ respective determinations with respect to fairness were made after consideration of the foregoing factors (as described above) as a whole.

The Original Buyer Group and the Additional Buyer Group Members (other than McGraw-Hill Education) believe these factors provide a reasonable basis for their belief that the Merger is both substantively and procedurally fair to the Company’s unaffiliated shareholders and ADS holders. McGraw-Hill Education believes the above identified factors provide a reasonable basis for its belief that the Merger is both substantively and procedurally fair to the Company’s unaffiliated shareholders and ADS holders; however, notwithstanding such belief, McGraw-Hill Education has not changed its views from its prior public statements referred to elsewhere in this proxy statement. The respective beliefs of the Original Buyer Group and each of the Additional Buyer Group Members, however, are not intended to be and should not be construed as a recommendation by any member of the Buyer Group to any shareholder or ADS holder of the Company as to how such shareholder or ADS holder should vote with respect to the approval of the Merger Agreement.

Certain Financial Projections

The Company’s management does not, as a matter of course, make available to the public future financial projections. However, in connection with their financial analysis of the Merger, the Company’s management provided certain financial projections for fiscal years 2013 through 2017 to the Independent Committee, the Company’s board of directors and Houlihan Lokey. See “— Background of the Merger.” Houlihan Lokey’s financial analysis below contains material portions of these financial projections. These financial projections, which were based on the Company’s management’s projection of the Company’s future financial performance as of the date provided, were prepared for internal use and to assist Houlihan Lokey with their financial analysis, and were not prepared with a view toward public disclosure or compliance with published guidelines of the SEC or the American Institute of Certified Public Accountants regarding forward-looking information or U.S. generally accepted accounting principles (“GAAP”).

In compiling the projections, the Company’s management took into account historical performance, combined with estimates regarding revenues, gross profit, EBITDA and net income. In addition, factors such as industry performance, the market for our existing and new services, the competitive environment, expectations regarding future acquisitions or any other transaction and general business, economic, regulatory, market and financial conditions, all of which are difficult to predict and beyond the control of the Company’s management, may cause the projections or the underlying assumptions not to be reflective of actual future results. In addition, the projections do not take into account any circumstances or events occurring after the date that they were prepared and, accordingly, do not give effect to completion of the Merger or any changes to our operations or strategy that may be implemented or that were not anticipated after the time the projections were prepared. As a result, there can be no assurance that the projections will be realized, and actual results may be materially different than those contained in the projections.

Although the projections are presented with numerical specificity, they reflect numerous assumptions and estimates as to future events made by the Company’s management that the Company’s management believed were reasonable at the time the projections were prepared. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Neither the Company’s independent registered public accounting firm nor any other independent accountants have compiled, examined or performed any procedures with respect to these financial projections, nor have they expressed any opinion or given any form of assurance on the financial projections or their achievability and they assume no responsibility for, and disclaim any association with, the prospective financial information.

The primary assumptions underlying the Company’s financials projections provided to the Independent Committee and Houlihan Lokey consist of the following: (i) the online degree program industry will remain a highly regulated industry under strict control of the Chinese Ministry of Education in terms of new program

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approval and tuition changes; (ii) the Company’s annual revenue will continue to grow at a rate of 7% to 10% per year; (iii) stronger competition, as well as increased staffing costs and selling expenses, will place pressure on gross margins and operating margins over time; (iv) the Company will need to make investments in additional technological updates to meet customers’ demand; (v) the Company will have increased working capital needs to provide more attractive collaborative terms to alliance universities and to maintain good long-term relationships with them; and (vi) the Company’s Chinese operating affiliates will continue to enjoy various preferential tax treatments.

These projections are not included in this proxy statement in order to induce any holder of Shares or ADSs to vote in favor of adoption of the Merger Agreement or to elect not to seek his, her or its dissenters’ rights.

The following table summarizes the financial projections prepared by our management and provided to Houlihan Lokey on December 11, 2013 and considered by the Independent Committee and Houlihan Lokey in connection with their analysis of the proposed transaction:

		Management Projections(1) Fiscal Year Ending December 31,
($ millions)(1)		2013E				2014E				2015E				2016E				2017E
Revenue			89.4				98.0				103.6				113.7				23.5
Gross Profit			53.9				57.6				60.1				65.2				69.9
EBITDA(2)			24.6				18.1				19.0				19.6				19.9
Net Income Attributable to the Shareholders of the Company			7.7				1.0				1.6				1.5				4.1

BY INCLUDING IN THIS PROXY STATEMENT A SUMMARY OF ITS INTERNAL FINANCIAL PROJECTIONS, THE COMPANY UNDERTAKES NO OBLIGATIONS TO UPDATE, OR PUBLICLY DISCLOSE ANY UPDATE TO, THESE FINANCIAL PROJECTIONS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE PROJECTIONS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAW.

NONE OF THE COMPANY OR OUR AFFILIATES, ADVISORS, OFFICERS, DIRECTORS OR REPRESENTATIVES HAS MADE OR MAKES ANY REPRESENTATION TO ANY SHAREHOLDER OR OTHER PERSON REGARDING THE ULTIMATE PERFORMANCE OF THE COMPANY COMPARED TO THE INFORMATION CONTAINED IN THE PROJECTIONS OR THAT PROJECTED RESULTS WILL BE ACHIEVED.

Opinion of Houlihan Lokey, the Independent Committee’s Financial Advisor

On December 30, 2013, Houlihan Lokey rendered an oral opinion to the Independent Committee(which was confirmed in writing by delivery of Houlihan Lokey’s written opinion dated December 30, 2013), to the effect that, as of December 30, 2013, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion, the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) was fair, from a financial point of view, to such holders.

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Houlihan Lokey’s opinion was directed to the Independent Committee and only addressed the fairness from a financial point of view of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) and does not address any other aspect or implication of the Merger. The full text of Houlihan Lokey’s written opinion is included as Annex B to this proxy statement and is incorporated herein by reference. You are encouraged to read the written opinion in its entirety for the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in preparing its opinion. However, Houlihan Lokey’s opinion, the summary of its opinion and the related analyses set forth in this proxy statement are not intended to be, and do not constitute advice or a recommendation to the Independent Committee or any holder of Shares or ADSs as to how to act or vote with respect to the Merger or related matters. Houlihan Lokey’s opinion should not be construed as creating any fiduciary duty on Houlihan Lokey’s part to any party or entity.

In arriving at its opinion, Houlihan Lokey, among other things:

Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and does not assume any responsibility with respect to such data, material and other information. In addition, management of the Company advised Houlihan Lokey, and Houlihan Lokey assumed, that the financial projections reviewed by Houlihan Lokey were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the future financial results and condition of the Company, and Houlihan Lokey expresses no opinion with respect to such projections or the assumptions on which they are based.

Houlihan Lokey relied upon and assumed, without independent verification, that there has been no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of the Company since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to Houlihan Lokey’s analyses or its opinion,

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and that there is no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading. In addition, Houlihan Lokey understands that financial projections for the Company have been prepared by the management of the Company in Renminbi (“RMB”), the legal currency of China. Houlihan Lokey utilized certain publicly available RMB to United States dollar exchange rates and Houlihan Lokey assumed, with the consent of the Independent Committee, that such exchange rates are reasonable to utilize for purposes of its analyses. Houlihan Lokey expressed no view or opinion as to any currency or exchange rate fluctuations and assumed, with the consent of the Independent Committee, that any such fluctuations will not in any respect be material to Houlihan Lokey’s analyses or its opinion. Further, management of the Company advised Houlihan Lokey that (i) the financial projections provided to Houlihan Lokey are the only projections prepared by management of the Company (or any affiliated entity) in connection with the Merger, (ii) they have not received, reviewed, approved, commented on or otherwise contributed to any other projections or similar information prepared by any other party in connection with the Merger, nor have they updated or otherwise revised the financial projections since the last date they were provided to Houlihan Lokey and (iii) to the best of their knowledge and belief, no other projections or similar information have been provided to any party involved in the Merger, and the Independent Committee has received all projections and/or similar information that has been received by any other party involved in the Merger.

Houlihan Lokey understands that the holders of the Rollover Shares indicated that they are only willing to consider entering into an agreement with Holdings and amongst themselves in relation to the Merger and have no interest in entering into any agreement, arrangement or understanding with other parties as an alternative thereto.

Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the Merger Agreement and all other related documents and instruments that are referred to therein are true and correct, (b) each party to the Merger Agreement and such other related documents and instruments will fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the Merger will be satisfied without waiver thereof, and (d) the Merger will be consummated in a timely manner in accordance with the terms described in all such agreements and other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also relied upon and assumed, without independent verification, that (i) the Merger will be consummated in a manner that complies in all respects with all applicable international, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the Merger will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would have an effect on the Merger or the Company that would be material to Houlihan Lokey’s analyses or its opinion. Houlihan Lokey also relied upon and assumed, without independent verification, at the direction of the Company, that any adjustments to the per Share merger consideration or per ADS merger consideration pursuant to the Merger Agreement will not be material to Houlihan Lokey’s analyses or its opinion. No such adjustments are currently contemplated. In addition, Houlihan Lokey relied upon and assumed, without independent verification, that the final form of the Merger Agreement will not differ in any material respect from the draft of the Merger Agreement identified above.

Furthermore, in connection with its opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of the Company or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which the Company is or may be a party or is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which the Company is or may be a party or is or may be subject. With the consent of the Independent Committee and based on discussions with Company management, Houlihan Lokey’s analyses in connection with its opinion

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excluded all cash held by joint ventures in which the Company or a Company subsidiary is a party, as cash held in such joint ventures is generally restricted and not available for use by the Company other than through the applicable joint venture.

Houlihan Lokey was directed by the Independent Committee not to and, therefore, Houlihan Lokey did not (a) initiate or participate in any negotiations with (other than participating in negotiations with the parties to the Merger), or solicit any indications of interest from, third parties with respect to the Merger, the securities, assets, businesses or operations of the Company or any other party, or any alternatives to the Merger, or (b) advise the Independent Committee, the board of directors or any other party with respect to alternatives to the Merger. Houlihan Lokey’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, the date of its opinion. Houlihan Lokey did not undertake, and is under no obligation, to update, revise, reaffirm or withdraw its opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey’s attention after the date of its opinion.

Houlihan Lokey’s opinion was furnished for the use of the Independent Committee (in its capacity as such) in connection with its evaluation of the Merger and may not be used for any other purpose without Houlihan Lokey’s prior written consent. Houlihan Lokey has consented to the inclusion of its opinion in its entirety and the description thereof in this proxy statement and any other filing the Company is required to make with the SEC in connection with the Merger if such inclusion is required by applicable law. Houlihan Lokey’s opinion should not be construed as creating any fiduciary duty on Houlihan Lokey’s part to any party. Houlihan Lokey’s opinion is not intended to be, and does not constitute, a recommendation to the Independent Committee, the board of directors, any security holder or any other person as to how to act or vote with respect to any matter relating to, or whether to tender shares in connection with, the Merger or otherwise.

Houlihan Lokey was not requested to opine as to, and Houlihan Lokey’s opinion does not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the Independent Committee, the board of directors, the Company, its security holders or any other party to proceed with or effect the Merger, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the Merger or otherwise (other than the per Share merger consideration and the per ADS merger consideration to the extent expressly specified therein), including, without limitation, the terms or aspects of any arrangements involving the Rollover Persons, voting agreements or any potential financing for the Merger or the likelihood of consummation thereof, (iii) the fairness of any portion or aspect of the Merger to the holders of any class of securities, creditors or other constituencies of the Company, or to any other party, except if and only to the extent expressly set forth in the last sentence of Houlihan Lokey’s opinion, (iv) the relative merits of the Merger as compared to any alternative business strategies that might exist for the Company or any other party or the effect of any other transaction in which the Company or any other party might engage, (v) the fairness of any portion or aspect of the Merger to any one class or group of the Company’s or any other party’s security holders or other constituents vis-à-vis any other class or group of the Company’s or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents), (vi) whether or not the Company, its security holders or any other party is receiving or paying reasonably equivalent value in the Merger, (vii) the solvency, creditworthiness or fair value of the Company or any other participant in the Merger, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the Merger, any class of such persons or any other party, relative to the per Share merger consideration, the per ADS merger consideration or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. Houlihan Lokey assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the Independent Committee, on the assessments by the Independent Committee, the board of directors, the Company and their respective advisors, as to all legal, regulatory, accounting, insurance and tax matters with respect to the Company and the Merger or otherwise.

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In preparing its opinion to the Independent Committee, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey’s analyses is not a complete description of the analyses underlying Houlihan Lokey’s opinion. The preparation of a fairness opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither a fairness opinion nor its underlying analyses is readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors or focusing on information presented in tabular format, without considering all analyses, methodologies and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Houlihan Lokey’s analyses and opinion. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques.

In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. Houlihan Lokey’s analyses involved judgments with regard to industry performance, general business, economic, regulatory, market and financial conditions and other matters, many of which are beyond the control of the Company, such as the impact of competition on the business of the Company and on the industry generally, industry growth and the absence of any material change in the financial condition and prospects of the Company or the industry or in the markets generally. No company, transaction or business used in Houlihan Lokey’s analyses for comparative purposes is identical to the Company or the Merger and an evaluation of the results of those analyses is not entirely mathematical. Houlihan Lokey believes that mathematical derivations (such as determining average and median) of financial data are not by themselves meaningful and should be considered together with qualities, judgments and informed assumptions. The estimates contained in the Company’s analyses and the implied reference range values indicated by Houlihan Lokey’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of the Company. Much of the information used in, and accordingly the results of, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.

Houlihan Lokey’s opinion was provided to the Independent Committee in connection with its evaluation of the Merger and was only one of many factors considered by the Independent Committee in evaluating the Merger. Neither Houlihan Lokey’s opinion nor its analyses were determinative of the merger consideration or of the views of the Independent Committee or management with respect to the Merger or the per Share merger consideration and the per ADS merger consideration. The type and amount of consideration payable in the Merger were determined through negotiation between the Independent Committee and Holdings, and the decision to enter into the Merger was solely that of the Independent Committee and board of directors.

The following is a summary of the material analyses reviewed by Houlihan Lokey with the Independent Committee in connection with Houlihan Lokey’s opinion rendered on December 30, 2013. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey’s analyses.

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For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

Unless the context indicates otherwise, enterprise values and equity values derived from the selected companies analysis described below were calculated using the closing price of our ADSs and the common stock of the selected online education companies listed below as of December 27, 2013. Accordingly, this information may not reflect current or future market conditions. Estimates of 2013, 2014, and 2015 EBITDA for the Company were based on estimates provided by Company management. Estimates of 2013, 2014 and 2015 EBITDA for the selected online education companies listed below were based on certain publicly available research analyst estimates for those online education companies.

Selected Companies Analysis.  Houlihan Lokey calculated multiples of enterprise value based on certain financial data for the Company and the selected online education companies listed in the table below. The calculated multiples included enterprise value as a multiple of estimated latest twelve months (“LTM”) for which public information was available for 2013, 2014 and 2015 EBITDA.

The table below sets forth a summary of relevant information reviewed by Houlihan Lokey for conducting its selected companies analysis. Although none of the companies under the selected companies analysis is directly comparable to the Company, the selected companies are online education companies with operations and/or other criteria, such as lines of business, markets, business risks, growth prospects, maturity of business and size and scale of business that, for the purposes of its analysis, Houlihan Lokey and the management of the Company considered generally relevant in evaluating the Company. The foregoing criteria were consistently applied to all selected companies. Information for each of the selected companies was based on each company’s most recent publicly available financial information and closing share prices as of December 27, 2013.

Selected Companies Trading Statistics
(dollars and shares in millions, except per share or per ADS values)

Price 11/27/2013 ($)

Eq. Market Value(1) ($ mm)

Enterprise Value(2) ($ mm)

Enterprise Value/EBITDA

Company

Ticker

Country

LTM (x)

NFY (x)

NFY+1 (x)

NFY+2 (x)

Selected Online Degree Companies

Apollo Education Group, Inc.

NasdaqGS: APOL

United States

$

27.10

$

3,086.0

$

2,258.1

3.0x

4.2x

4.2x

4.8x

Grand Canyon Education, Inc.

NasdaqGS: LOPE

United States

43.57

2,067.1

1,992.1

12.4x

11.6x

11.6x

8.8x

Capella Education Co.

NasdaqGS: CPLA

United States

66.66

839.2

687.9

8.0x

8.0x

7.9x

7.4x

Bridgepoint Education

NYSE: BPI

United States

17.46

987.3

520.3

3.9x

5.1x

6.4x

6.7x

Career Education Corp.

NasdaqGS: CECO

United States

5.70

382.8

299.7

NMF

NMF

NMF

NMF

National American University

NasdaqGM: NAUH

United States

3.55

89.1

67.4

4.4x

5.0x

3.7x

3.7x

High

$

3,086.0

$

2,258.1

12.4x

11.6x

11.6x

8.8x

Low

$

89.1

$

67.4

3.0x

4.2x

3.7x

3.7x

Mean

$

1,241.9

$

970.9

6.3x

6.8x

6.7x

6.3x

Median

$

913.3

$

604.1

4.4x

5.1x

6.4x

6.7x

Sources: Capital IQ, Company public filings, analyst reports

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Notes:

RSU refers to restricted share unit

ChinaEdu Corporation’s share count based on 9,489,879 ADS (or 28,469,637 ordinary shares) outstanding which takes into consideration the exercisable outstanding options/RSUs that are converted into ADS based on the treasury stock method.

LTM refers to the most recently completed twelve month period for which financial information has been made public.

NFY refers to next fiscal year; NFY+1 refers to the year after next fiscal year, NFY+2 refers to the second year after next fiscal year.

NFY+1 refers to the year after next fiscal year for which financial information has not been made public.

NFY+2 refers to the second year after next fiscal year for which financial information has not been made public.

NA refers to not available figure.

NMF refers to not meaningful figure.

No company used in this analysis for comparative purposes is identical to the Company.

Converted to US$ using relevant rates as of December 27, 2013.

Based on Houlihan Lokey's professional judgment and after taking into account qualitative and quantitative factors with respect to the Company and the selected companies, including as to size, growth and profitability, Houlihan Lokey applied the following selected multiple ranges derived from the selected companies to corresponding financial data for the Company:

		Selected Multiple Range
Multiple Description		Low				High
Enterprise Value as a multiple of:
LTM EBITDA			3.5 x				4.5 x
2013E EBITDA			3.5 x				4.5 x
2014E EBITDA			5.0 x				6.0 x
2015E EBITDA			5.0 x				6.0 x

The selected companies analysis indicated the following implied per ADS reference range for the Company, as compared to the proposed per ADS merger consideration:

Implied Per ADS Equity Reference Range for the Company		Per ADS Merger Consideration
$5.84 – $8.56 (based on LTM EBITDA)		$	7.00
$5.42 – $8.03 (based on 2013 EBITDA)		$	7.00
$5.87 – $7.78 (based on 2014 EBITDA)		$	7.00
$6.35 – $8.36 (based on 2015 EBITDA)		$	7.00

Discounted Cash Flow Analysis.  Houlihan Lokey performed a discounted cash flow analysis for the purpose of determining an illustrative range of implied equity value per ADS. A discounted cash flow analysis is a method of evaluating an asset using estimates of the unlevered free cash flows generated by the asset and taking into consideration the time value of money with respect to those future cash flows by calculating their “present value”. “Present value” refers to the current value of one or more future cash payments from the asset, which is referred to as that asset’s cash flows, and is obtained by discounting those cash flows back to the present using a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, capitalized returns and other appropriate factors. “Terminal value” refers to the capitalized value of all cash flows from an asset for periods beyond the final forecast period. Houlihan Lokey

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calculated the estimated net present value of the unlevered, after-tax free cash flows that the Company was forecasted to generate through fiscal 2017 based on internal estimates provided by the Company’s management. Houlihan Lokey calculated terminal values for the Company by applying a range of perpetuity growth rates of 2.0% to 4.0% to the Company’s estimated 2017 unlevered free cash flows adjusted for normalized levels of long-term depreciation and amortization, capital expenditures, and changes in working capital. The Company’s implied enterprise value was then calculated as the sum of the present value of the cash flows and terminal values, each as derived using discount rates ranging from 13.0% to 16.0%, which resulted from a weighted average cost of capital calculation (a measure of the weighted average expected return on a given company’s equity and debt securities based on their relative proportions in such company’s capital structure). Houlihan Lokey estimated the Company’s weighted average cost of capital by estimating the weighted average of the Company’s cost of equity (derived using the capital asset pricing model) and the Company’s after-tax cost of debt. Houlihan Lokey believes that this range of discount rates is consistent with the rate of return that security holders could expect to realize on alternative investment opportunities with similar risk profiles. With the consent of the Independent Committee, a range of the Company’s implied equity values were calculated as implied enterprise values plus the Company’s cash and short term investments (less cash held in accounts controlled by the Company’s various joint venture partnerships as this cash is required to fund continuing operations of each joint venture), and less total debt and minority interest. By dividing the range of implied equity values of the Company by its total number of outstanding ADSs, Houlihan Lokey derived the following reference range of implied value per ADS for the Company, as compared to the proposed per ADS consideration:

Implied Per ADS Equity Reference Range for the Company		Per ADS Merger Consideration
$4.19 – $7.83		$	7.00

Other Matters

Houlihan Lokey was engaged by the Independent Committee to act as its financial advisor in connection with the Merger and provide financial advisory services, including the issuance of an opinion to the Independent Committee regarding the fairness from a financial point of view of the per Share merger consideration and the per ADS merger consideration, as applicable, to be received in the Merger pursuant to the Merger Agreement by holders of Shares and ADSs (in each case, other than holders of Excluded Shares and/or Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs). The Independent Committee engaged Houlihan Lokey based on Houlihan Lokey’s experience and reputation. Houlihan Lokey is regularly engaged to provide advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Pursuant to the engagement letter between Houlihan Lokey and the Independent Committee, a fixed fee of US$50,000 was paid to Houlihan Lokey upon execution of the engagement letter, a fixed fee of US$200,000 was paid to Houlihan Lokey upon delivery of its opinion, and a fixed fee of US$200,000 may be paid entirely at the discretion of the Independent Committee upon closing of the Merger.

In the ordinary course of business, certain of Houlihan Lokey’s employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in, the Company or any other party that may be involved in the Merger and their respective affiliates or any currency or commodity that may be involved in the Merger.

Houlihan Lokey and certain of its affiliates have in the past provided investment banking, financial advisory and other financial services to certain affiliates of the Company and affiliates of the Company’s shareholder, McGraw-Hill Education, for which Houlihan Lokey and such affiliates have received, and may receive, compensation, including, among other things, having provided mergers and acquisition advisory services to Apollo Global Management, LLC (“Apollo”), the controlling shareholder of McGraw-Hill Education, and certain of its affiliates with respect to the sale of one of its former portfolio companies in 2012 for which an affiliate of Houlihan Lokey received a fee of $2,225,000. None of the services provided were related to the proposed transaction. Houlihan Lokey and certain of its affiliates may provide investment

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banking, financial advisory and other financial services to the Company, Holdings, McGraw-Hill Education, Apollo or other participants in the Merger or certain of their respective affiliates in the future, for which Houlihan Lokey and such affiliates may receive compensation. In addition, Houlihan Lokey and certain of its affiliates and certain of its and their respective employees may have committed to invest in private equity or other investment funds managed or advised by Apollo, other participants in the Merger or certain of their respective affiliates, and in portfolio companies of such funds, and may have co-invested with Apollo, other participants in the Merger or certain of their respective affiliates, and may do so in the future. Furthermore, in connection with bankruptcies, restructurings, and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, Apollo, other participants in the Merger or certain of their respective affiliates, for which advice and services Houlihan Lokey and such affiliates have received and may receive compensation.

Purpose of and Reasons for the Merger

Under a possible interpretation of the SEC rules governing going private transactions, each member of the Buyer Group may be deemed to be engaged in a going private transaction and, therefore, required to express his or its reasons for the Merger to the Company’s unaffiliated shareholders and ADS holders, as defined in Rule 13e-3 of the Exchange Act. Each member of the Buyer Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. For the Buyer Group, the purpose of the Merger is to enable Holdings to acquire 100.0% control of the Company in a transaction in which the Company’s shareholders and ADS holders (other than the Excluded Shares and the Dissenting Shares, including Excluded Shares and Dissenting Shares represented by ADSs) will be cashed out in exchange for $2.33 per Share or $7.00 per ADS, so that Holdings will bear the rewards and risks of the sole ownership of the Company after the Merger, including any future earnings and growth of the Company as a result of improvements to the Company’s operations or acquisitions of other businesses. In addition, the Merger will allow the Buyer Group to maintain a significant portion of their investment in the Company through their respective indirect ownership in Holdings as described under “Special Factors — Interests of Certain Persons in the Merger — Interests of the Buyer Group” below and at the same time enable Mrs. Julia Huang and Mr. Shawn Ding to maintain a leadership role with the Company.

The Buyer Group believes the operating environment has become more challenging since the Company’s initial public offering. There is greater competition against both domestic and multinational companies in many of the service areas in which the Company operates. These changes have increased the uncertainty and volatility inherent in the business models of companies similar to the Company. As a result, the Buyer Group is of the view that there is potential for considerably greater short- and medium-term volatility in the Company’s earnings. Responding to current market challenges will require tolerance for volatility in the performance of the Company’s business and a willingness to make business decisions focused on improving the Company’s long-term profitability. The Buyer Group believes that these strategies would be most effectively implemented in the context of a private company structure. As a privately held entity, the Company’s management will have greater flexibility to focus on improving long-term profitability without the pressures exerted by the public market’s valuation of the Company and its emphasis on short-term period-to-period performance.

Further, as a privately held company, the Company will be relieved of many of the expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the U.S. federal securities laws, including the Exchange Act and the Sarbanes-Oxley Act.

The Buyer Group decided to undertake the going private transaction at this time because it wants to take advantage of the benefits of the Company being a privately held company as described above and because the Buyer Group was able to obtain debt financing in connection with the Merger. In the course of considering the going private transaction, the Buyer Group (other than McGraw-Hill Education) did not consider alternative transaction structures, because the Buyer Group believed the Merger was the most direct and effective way to enable the Buyer Group to acquire ownership and control of the Company. McGraw-Hill

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Education has not changed its views from its prior public statements referred to elsewhere in this proxy statement, including the views expressed in its presentation to the Independent Committee of alternative options to the take private transaction.

Effects of the Merger on the Company

Private Ownership

ADSs of the Company are currently listed on NASDAQ under the symbol “CEDU.” It is expected that, immediately following the completion of the Merger, the Company will cease to be a publicly traded company and will instead become a privately held company owned directly by Holdings and indirectly, through Holdings, by the Buyer Group. Following the completion of the Merger, the ADSs will cease to be listed on NASDAQ, and price quotations with respect to sales of the ADSs in the public market will no longer be available. In addition, ninety (90) days after the filing of Form 15 in connection with the completion of the Merger or such longer period as may be determined by the SEC, registration of the Company’s ADSs and the underlying Shares under the Exchange Act will be terminated. After the effective time of the Merger, the Company will no longer be required to file periodic reports with the SEC or otherwise be subject to the U.S. federal securities laws, including the Sarbanes-Oxley Act of 2002, applicable to public companies, and our shareholders will no longer enjoy the rights or protections that the U.S. federal securities laws provide.

Upon completion of the Merger, each outstanding Share and ADS, except for the Excluded Shares and the Dissenting Shares (please see “Dissenters’ Rights” below), will be cancelled in exchange for the right to receive $2.33 per Share or $7.00 per ADS, respectively, in cash, without interest and net of any applicable withholding taxes. The Rollover Shares outstanding immediately prior to the effective time of the Merger will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares of Holdings and will be cancelled and cease to exist at the effective time of the Merger, and the Company Treasury Shares will, by virtue of the Merger and without any action on the part of their holders, cease to be outstanding and will be cancelled and cease to exist without payment of any consideration or distribution therefor. At the effective time of the Merger, each outstanding ordinary share of Merger Sub will be converted into one fully paid and non-assessable ordinary share of the Surviving Corporation. As a result, current shareholders and ADS holders of the Company, other than the Rollover Shareholders, will no longer have any equity interest in, or be shareholders or ADS holders of, the Company upon completion of the Merger. As a result, our shareholders and ADS holders, other than the Rollover Shareholders, will not have the opportunity to participate in the earnings and growth of the Company and they will not have the right to vote on corporate matters. Similarly, our current shareholders and ADS holders, other than the Rollover Shareholders, will not be exposed to the risk of loss in relation to their investment in the Company.

At the effective time of the Merger, each Company Option that is then outstanding will be cancelled and converted into and exchanged for a Holdings Option. At the effective time, each Company RSU will be cancelled and converted into and exchanged for a Holdings RSU.

Directors and Management of the Surviving Corporation

If the Merger is completed, the current memorandum of association and articles of association of the Company will be replaced in its entirety by the memorandum of association and articles of association of Merger Sub, as in effect prior to the completion of the Merger (except that, at the effective time of the Merger, Article I of the memorandum and articles of association of the Surviving Corporation will be amended to read as follows: “The name of the company is ChinaEdu Corporation”) until thereafter changed or amended as provided therein or by applicable law. In addition, the directors of Merger Sub at the effective time of the Merger will become the directors of the Surviving Corporation immediately after the Merger and the officers of the Company will remain the officers of the Surviving Corporation. Promptly following the Merger, McGraw-Hill Education will have the right to designate one or more members to the Surviving Corporation’s Board, and each committee thereof, as is proportionate to its equity ownership in the Surviving Corporation.

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Primary Benefits and Detriments of the Merger

The primary benefits of the Merger to the Company’s unaffiliated shareholders and ADS holders include, without limitation, the following:

The primary detriments of the Merger to the Company’s unaffiliated shareholders and ADS holders include, without limitation, the following:

The primary benefits of the Merger to the Buyer Group include the following:

The primary detriments of the Merger to the Buyer Group include the following:

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The Company’s Net Book Value and Net Earnings

The table below sets out the indirect interest in the Company’s net book value and net earnings for the Buyer Group before and immediately after the Merger, based on the historical net book value of the Company as of December 31, 2012 and the historical net earnings of the Company for the year ended December 31, 2012.

		Ownership Prior to the Merger(1)																Ownership After the Merger
		Net Book Value								Earnings								Net Book Value								Earnings
Name		$000				%				$000				%				$000				%				$000				%
Mrs. Huang and her affiliate South Lead Technology Limited			8,719				8.4	%			509				8.4	%			15,353				14.7	%			896				14.7	%
Mr. Ding and his affiliate Moral Known Industrial Limited			10,829				10.4	%			632				10.4	%			19,068				18.2	%			1,113				18.2	%
InterVision Technology Ltd.			6,062				5.8	%			354				5.8	%			10,673				10.2	%			623				10.2	%
Lingyuan Furong Investment Management Co., Ltd.			5,612				5.4	%			328				5.4	%			9,882				9.5	%			577				9.5	%
MLP Holdings Limited			6,929				6.6	%			404				6.6	%			12,200				11.7	%			712				11.7	%
New Value Technology Limited			5,253				5.0	%			307				5.0	%			9,250				8.9	%			540				8.9	%
McGraw-Hill Global Education Intermediate Holdings, LLC			16,526				15.8	%			965				15.8	%			20,603				19.7	%			1,203				19.7	%
Weblearning Company Limited			2,483				2.4	%			145				2.4	%			4,371				4.2	%			255				4.2	%
Ellen Huang			83				0.1	%			5				0.1	%			146				0.1	%			9				0.1	%
Guo Young			263				0.3	%			15				0.3	%			464				0.4	%			27				0.4	%
Gegeng Tana			62				0.1	%			4				0.1	%			109				0.1	%			6				0.1	%
Mei Yixin			773				0.7	%			45				0.7	%			1,360				1.3	%			79				1.3	%
Pan Zhixin			502				0.5	%			29				0.5	%			883				0.8	%			52				0.8	%
Buyer Group total			64,095				61.4	%			3,741				61.6	%			104,363				100	%			6,092				100	%

Plans for the Company after the Merger

Following the completion of the Merger, the Buyer Group anticipates that the Company will continue to conduct its operations substantially as they are currently being conducted, except that it will cease to be a publicly traded company and will instead be a wholly-owned subsidiary of Holdings. The Buyer Group currently plans to repay the debt incurred to finance the Merger using the operating cash flow of the Surviving Corporation in accordance with the terms of the debt financing agreement. See “Special Factors — Financing — Debt Financing” beginning on page 64 for additional information.

Subsequent to the completion of the Merger, the Company will no longer be subject to the Exchange Act and NASDAQ compliance and reporting requirements and the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

The Buyer Group has advised the Company that, except as set forth in this proxy statement, the Buyer Group does not have any current plans, proposals or negotiations that relate to or would result in any of the following:

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Subsequent to the completion of the Merger, the Company’s management and board of directors will continuously evaluate and review the Company’s business and operations and may propose or develop new plans and proposals, including any of the foregoing actions and any actions to address the challenges referred to in “Special Factors — Purpose of and Reasons for the Merger” above, in each case, which they consider to be in the best interests of the Company and its shareholders. The Buyer Group expressly reserves the right to make any changes they deem appropriate to the operation of the Company in light of such evaluation and review as well as any future developments.

Alternatives to the Merger

The board of directors of the Company did not independently determine to initiate a process for the sale of the Company. The Independent Committee was formed on June 24, 2013, in response to the receipt of the June 20 Proposal. Starting in July 2013, the Independent Committee discussed with its financial and legal advisors at various times whether a competitive bidding process could be established with McGraw-Hill Education and other potential bidders. The Independent Committee subsequently observed that although McGraw-Hill Education in its letter dated July 3, 2013 stated that the July 20 Proposal undervalued the Company and alternate transactions could offer greater value, McGraw-Hill Education’s presence was unlikely to spur a competitive bidding situation because its discussions with the Original Buyer Group were primarily focused on whether McGraw-Hill Education could join the Original Buyer Group to pursue the June 20 Proposal and, if yes, the amount of Shares it could rollover and not on alternative acquisition proposals for the Company. Moreover, despite being repeatedly urged by the Independent Committee, McGraw-Hill Education never submitted an alternative acquisition bid for the Company or stated a specific offer price which it would consider to be fair. At the same time, the Independent Committee considered whether to solicit interest from other parties through a market check process prior to McGraw-Hill Education joining with the Original Buyer Group, notwithstanding that McGraw-Hill Education did not appear to be willing to submit an alternative acquisition bid. The Independent Committee concluded that such solicitation was unlikely to result in alternative proposals primarily because, despite ample opportunity, since the Company’s receipt and public disclosure of the June 20 Proposal, the Company had not received any actionable offer from any third party for (a) a merger or consolidation of the Company with another company, (b) the sale or transfer of all or substantially all of the Company’s assets or (c) the purchase of all or a substantial portion of the Shares that would enable such person to exercise control of or significant influence over the Company. The Independent Committee also took into account the fact that any likely bidders would be reluctant to bid in the face of opposition from the Company’s senior management team. Moreover, the Independent Committee took into consideration that, prior to McGraw-Hill Education joining the Buyer Group, the Original Buyer Group’s beneficial ownership was such that it could block a competing transaction under Cayman Islands law and that, after McGraw-Hill Education joined the Buyer Group, the parties collectively beneficially owned approximately 61.6% of the total outstanding Shares (as of December 31, 2013). It also took into account its determination to insist upon the right to terminate any definitive merger agreement that the Company entered into in order to accept a superior proposal. In light of the foregoing and the Buyer Group’s express intention not to sell its Shares or ADSs to any third party, the Independent Committee determined that third parties were unlikely to have serious interest in pursuing a transaction with the Company and there was a serious risk that under those circumstances, third parties could use the process simply to get access to the Company’s confidential information for their own commercial motives.

At the time of its approval of the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, the Independent Committee also took into account that, prior to the receipt of shareholder approval, the Company can terminate the Merger Agreement in order to enter into an acquisition agreement with respect to a superior proposal without paying a termination fee. In this regard, the Independent Committee recognized that it has flexibility under the Merger Agreement to respond to an alternative transaction proposed by a third party that is or is reasonably likely to result in a superior proposal, including the ability to provide information to and engage in discussions and negotiations with such party (and, if such proposal is a superior proposal, recommend such proposal to the Company’s shareholders).

The Independent Committee did not consider any other form of transaction such as a scheme of arrangement or reverse stock split because the Independent Committee believed that the proposed transaction was the most direct and least confusing to unaffiliated shareholders in terms of deal structure.

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Effects on the Company if the Merger is not Completed

If the Company’s shareholders do not adopt the Merger Agreement and approve the transactions contemplated thereby, including the Merger, or if the Merger is not completed for any other reason, the Company’s shareholders and ADS holders will not receive any merger consideration pursuant to the Merger Agreement. In addition, the Company will remain a publicly traded company. The Company’s ADSs will continue to be listed and traded on the NASDAQ, provided that the Company continues to meet the NASDAQ’s listing requirements. In addition, the Company will remain subject to SEC reporting obligations. Therefore, the Company’s shareholders and ADS holders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of the Company’s Shares and ADSs.

From time to time, the Company’s board of directors will evaluate and review, among other things, the business, operations, dividend policy and capitalization of the Company and make such changes as are deemed appropriate and continue to seek to identify strategic alternatives to enhance shareholder value. If the Merger Agreement is not adopted by the Company’s shareholders or if the Merger is not consummated for any other reason, there can be no assurance that any other transaction acceptable to the Company will be offered, or that the business, prospects or results of operations of the Company will not be adversely impacted.

Financing

The Buyer Group estimate that the total amount of funds required to complete the Merger and related transactions and pay related fees and expenses will be approximately $32.0 million, assuming no exercise of dissenters’ rights by shareholders of the Company. In calculating this amount, the Company and the Buyer Group do not consider the value of the Rollover Shares which will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings. The Buyer Group expects this amount to be provided through a combination of (a) debt financing of $30.0 million from China Merchants Bank; and (b) cash from the resources of the Company and its subsidiaries.

Rollover Financing

Concurrently with the execution of the Merger Agreement, the Rollover Shareholders entered into the Contribution Agreement with Holdings pursuant to which the Rollover Shareholders have agreed, among other things, to contribute to Holdings the Rollover Shares (aggregating approximately 61.6% of the outstanding Shares as of December 31, 2013 (based on pro forma information prepared by the Company), which is the equivalent of a $43.1 million investment based upon the per Share merger consideration of $2.33) immediately prior to the closing of the Merger and such Rollover Shares will not be converted into and exchanged for the right to receive the merger consideration. As consideration, each of the Rollover Shareholders will receive a certain equity interest in Holdings at a value equal to (a) the total number of the Rollover Shares contributed by such Rollover Shareholder multiplied by (b) the per Share merger consideration of $2.33 (or per ADS merger consideration of $7.00, if applicable) under the Merger Agreement.

In addition, from the date of the Contribution Agreement until termination thereof, the Rollover Shareholders will not, directly or indirectly, (i) tender any Rollover Shares into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, encumber, assign or otherwise dispose of (collectively, “Transfer”), or enter into any contract, option or other arrangement or understanding with respect to the Transfer of any Rollover Shares or any right, title or interest thereto or therein (including by operation of law), (iii) deposit any Rollover Shares into a voting trust or grant any proxy or power of attorney or enter into a voting agreement with respect to any Rollover Shares (other than the Voting Agreement and the Consortium Agreement, as amended), (iv) knowingly take any action that would make any representation or warranty of such Rollover Shareholder set forth in the Contribution Agreement untrue or incorrect or have the effect of preventing, disabling or delaying such Rollover Shareholder from performing any of his, her, or its obligations under the Contribution Agreement, or (v) agree (whether or not in writing) to take any of the actions referred to in (i) through (iv) above.

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The consummation of the contribution by each Rollover Shareholder of the Rollover Shares held by it is subject to the satisfaction in full (or waiver) of each of the conditions to Holdings’ and Merger Sub’s obligations to consummate the transactions contemplated by the Merger Agreement. Subject to the foregoing, the closing of the contribution shall take place no later than one business day prior to the closing of the Merger. The Contribution Agreement will terminate (a) with respect to McGraw-Hill Education only, in the event that McGraw-Hill Education withdraws from the Buyer Group in accordance with the Consortium Agreement, as amended, in relation to an amendment or waiver of any term or condition in or the granting of any consent under the Merger Agreement, or (b) upon the valid termination of the Merger Agreement in accordance with its terms.

Debt Financing

In connection with its entry into the Merger Agreement, Holdings, together with Merger Sub, South Lead Technology Limited, Moral Known Industrial Limited, Mr. Shawn Ding and Mrs. Julia Huang, entered into a facility agreement with China Merchants Bank dated December 24, 2013. The facility agreement provides for a US$30.0 million term loan to Holdings. The loan will be used to finance the Merger and related transactions and the payment of associated fees, costs and expenses.

The Facility.  The borrower under the facility is Holdings. The term of the facility will be the earlier of thirty three months from the first utilization of the facility or thirty nine months from December 24, 2013. The stated and effective interest rate under the facility will be at a rate of LIBOR plus margin. Interest will be payable at the end of each interest period set forth in the facility agreement (but at least every three months). The margin of the facility will be 3.05% per annum. The upfront fee of the facility is 0.75%, 0.75% and 0.5625% per annum respectively, which will be payable within three business days from the first utilization date of the facility, the first business day of the month falling thirteen months from the first utilization date of the facility, and the first business day of the month falling twenty five months from the first utilization date of the facility, respectively. The commitment fee is 0.35% per annum of the facility amount payable on a monthly basis during the availability period of the facility, which is the period commencing on (and including) December 24, 2013 and ending on (and including) the date which is the earlier of (a) the closing date of the Merger and (b) the last business day falling six months from December 24, 2013.

Guarantees/Collateral.  The facility will be guaranteed on a joint and several basis by substantially all the assets of Holdings and Merger Sub and, following the consummation of the Merger, the Company, and, additionally, by the shares in the Merger Sub and, following the consummation of the Merger, the Company. South Lead Technology Limited and Moral Known Industrial Limited also guaranteed the facility as corporate guarantor with equity of each of the companies. Mrs. Julia Huang and Mr. Shawn Ding also provided personal guarantees.

Conditions:  The facility is subject to certain closing conditions, including, without limitation:

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Other Terms.  The facility agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, restrictions on indebtedness, capital expenditure, disposal of assets, declaration of dividends and mergers and consolidations. The facility agreement also includes customary events of default.

Although the debt financing described in this proxy statement is not subject to a “market out” provision, which would have allowed China Merchants Bank not to fund the facility if certain conditions in the financial markets prevail, there is still a risk that such debt financing may not be funded when required. As of the date of this proxy statement, no alternative financing arrangements or alternative financing plans have been made in the event the debt financing described in this proxy statement is not made available as anticipated.

To date, Holdings has no plans to refinance the facility.

Remedies

The parties are entitled to an injunction, specific performance and other equitable relief to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions thereof, this being in addition to any other remedy to which they are entitled at law or in equity.

Interests of Certain Persons in the Merger

In considering the recommendation of the Independent Committee and our board of directors with respect to the Merger, you should be aware that each member of the Buyer Group has interests in the transaction that are different from, and/or in addition to, the interests of our shareholders generally. The Company’s board of directors and Independent Committee were aware of such interests and considered them, among other matters, in reaching their decisions to approve the Merger Agreement and the transactions contemplated thereby, including the Merger, and recommend that our shareholders vote in favor of approving the Merger Agreement and the transactions contemplated thereby, including the Merger.

Interest of the Buyer Group

As the result of the Merger, Holdings will own, and the Buyer Group will indirectly own through its equity interests in Holdings, 100% of the equity interest in the Surviving Corporation immediately following the completion of the Merger. Because of Holdings’ equity interest in the Surviving Corporation, each member of the Buyer Group will directly or indirectly enjoy the benefits from any future earnings and growth of the Company after the Merger which, if the Company is successfully managed, could exceed the value of their original investments in the Company. The Buyer Group will also bear, through its equity interests in Holdings, the corresponding risks of any possible decreases in the future earnings, growth or value of the Surviving Corporation. The Buyer Group’s investment, through its equity interests in Holdings, in the Surviving Corporation will be illiquid, with no public trading market for the Surviving Corporation’s shares and no certainty that an opportunity to sell its shares in the Surviving Corporation at an attractive price, or that dividends paid by the Surviving Corporation will be sufficient to recover its investment.

The Merger may also provide additional means to enhance shareholder value for the Buyer Group, including improved profitability due to the elimination of the expenses associated with public company reporting and compliance, increased flexibility and responsiveness in management of the business to achieve growth and respond to competition without the restrictions of short-term earnings comparisons, and additional means for making liquidity available to the Buyer Group, such as through dividends or other distributions.

Treatment of Shares, Company Options and Company RSUs, including Those Held by Directors and Executive Officers

At the effective time of the Merger, each Company Option that is then outstanding and unexercised, including those held by our directors and executive officers, will be cancelled and converted into and exchanged for the right to receive a Holdings Option. Each Holdings Option shall have an exercise or

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purchase price equal to the exercise or purchase price of the corresponding Company Option. Each Holdings Option shall otherwise retain the same grant date, the same vesting or exercise schedule, the same term and expiration date and substantially the same other material terms and conditions as each Company Option.

At the effective time of the Merger, each Company RSU that is outstanding, including those held by our directors and executive officers, will be cancelled and converted into and exchanged for the right to receive a Holdings RSU. Each Holdings RSU shall be subject to the same material terms and conditions as each Company RSU.

Indemnification and Insurance

Pursuant to the Merger Agreement, Holdings and Merger Sub have agreed that:

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The Independent Committee

On June 24, 2013, the Company’s board of directors established an Independent Committee of directors to consider the June 20 Proposal from the Buyer Group and to take any actions it deems appropriate to assess the fairness and viability of such proposal. The Independent Committee is composed of independent directors Messrs. Samuel Yen (who served as the chairman), Min Fan and Tianwen Liu. All such directors are free from any affiliation with the Buyer Group, and none of such directors is or was ever an employee of the Company or any of its subsidiaries or has any financial interest in the Merger that is different from that of the unaffiliated shareholders and unaffiliated ADS holders other than (i) the director's receipt of board compensation in the ordinary course, (ii) Independent Committee members' compensation in connection with its evaluation of the Merger (which is not contingent upon the completion of the Merger or the Independent Committee 's or board's recommendation of the Merger), and (iii) the director's indemnification and liability insurance rights under the Merger Agreement. The Company's board of directors did not place any limitations on the authority of the Independent Committee regarding its investigation and evaluation of the Merger.

The Company has compensated the members of the Independent Committee in exchange for their service in such capacity in the amount of $18,000 per member and $25,000 for the chairman of the Independent Committee, the payment of which is not contingent upon the completion of the Merger or the Independent Committee's or the board's recommendation of the Merger.

Position with the Surviving Corporation

After completion of the Merger, Mrs. Julia Huang expects to continue to serve as executive chairman of the board of directors of the Surviving Corporation and Mr. Shawn Ding expects to continue to serve as chief executive officer of the Surviving Corporation. It is anticipated that the other executive officers of the Company will hold positions with the Surviving Corporation that are substantially similar to their current positions.

Related Party Transactions

Mr. Zonglian Gu, one of our directors, is the dean of Renmin University Online Education School and also the general manager of CMR Web Learning Co., Ltd. (“CMR Web”), which is the collaborative alliance between Renmin University and the Company. CMR Web is the Company's 70% owned subsidiary. The remaining 30% of CMR Web is owned by Rendashiji Technology Development Co., Ltd. (“Rendashiji”), a wholly-owned subsidiary of Renmin University of China. Mr. Gu is not a shareholder of Rendashiji, nor does he hold any management positions with Rendashiji.

Under the current PRC legal framework, foreign-invested companies are not permitted to invest in K-12 schools in China. We operate the two private primary and secondary schools through Hongcheng Education, and have entered into a series of agreements with Hongcheng Education and its shareholders, Mr. Changqing Xie, one of our officers, and Mr. Xueshan Yang, one of our former directors, in order to maintain effective control over, and receive the economic benefits of Hongcheng Education. Currently, each Mr. Xie and Mr. Yang holds 72% and 28% of the equity interest in Hongcheng Education, respectively.

The material agreements that currently govern the relationship and economic arrangements between Hongcheng Education and us are described in greater detail below:

ChinaEdu and Changqing Xie Loan Agreement.  We entered into a loan agreement with Mr. Xie on January 3, 2005 (and amended such agreement on July 12, 2005 and July 18, 2007), and another loan agreement with Mr. Xie on July 15, 2005 (and amended on July 18, 2007), pursuant to which agreements, we loaned Mr. Xie approximately $4.8 million to fund the registered capital requirements of Hongcheng Education. The terms of the loan are 20 years and may be extended with the consent of the parties. To the extent permitted under PRC law, the loan may only be repaid by Mr. Xie transferring all of his equity interests in Hongcheng Education to us (or our designee). Mr. Xie has agreed that we have the right to appoint all directors to the board of directors of Hongcheng Education to which Mr. Xie is entitled to appoint in his capacity as a shareholder of the entity.

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ChinaEdu and Xueshan Yang Loan Agreement.  We entered into a loan agreement with Mr. Yang on January 3, 2005 (and amended such agreement in June 2005 and July 18, 2007), pursuant to which we loaned Mr. Yang approximately $1.8 million to fund the registered capital requirements of Hongcheng Education. The term of the loan is 20 years and may be extended with the consent of the parties. To the extent permitted under PRC law, the loan may only be repaid by Mr. Yang transferring all of his equity interests in Hongcheng Education to us (or our designee). Mr. Yang has agreed that we have the right to appoint all directors to the board of directors of Hongcheng Education that Mr. Yang is entitled to appoint in his capacity as a shareholder of the entity.

Hongcheng Education, Changqing Xie, Xueshan Yang and Hongcheng Technology Shareholder’s Voting Rights Entrustment Agreement.  Hongcheng Education, Mr. Xie and Mr. Yang and Hongcheng Technology entered into a shareholder’s voting rights entrustment agreement dated on July 12, 2005, pursuant to which Mr. Xie and Mr. Yang irrevocably entrusted Hongcheng Technology with the right to act as their proxies and vote their shares in Hongcheng Education. Mr. Xie entered into a second similar agreement with Hongcheng Education and Hongcheng Technology on December 20, 2005, which represents the additional equity interests in Hongcheng Education held by Mr. Xie after he subscribed additional registered capital on Hongcheng Education on December 15, 2005. These agreements will remain effective as long as Mr. Xie or Mr. Yang, respectively, remains a shareholder in Hongcheng Education.

Changqing Xie, Xueshan Yang and Hongcheng Technology Call Option Agreement.  Mr. Xie and Mr. Yang entered into a call option agreement with Hongcheng Technology on July 12, 2005 pursuant to which Mr. Xie and Mr. Yang each granted irrevocable options to purchase all or, in the case of Mr. Xie, a portion, of their respective equity interests in Hongcheng Education to Hongcheng Technology at the lowest price permitted under applicable Chinese laws. Mr. Xie entered into a second similar call option agreement with Hongcheng Technology on December 20, 2005 granting similar rights to Hongcheng Technology with respect to shares in Hongcheng Education held by Mr. Xie that were not covered under the original call option agreement.

Changqing Xie and Hongcheng Technology Equity Pledge Agreement.  As security for Mr. Xie’s obligations under the call option agreements and shareholder voting rights entrustment agreements with Hongcheng Technology and Hongcheng Education’s obligations under the technical consulting and services agreement with Hongcheng Technology, Mr. Xie pledged all of his equity interests in Hongcheng Education and all distributions arising from those interests to Hongcheng Technology under equity pledge agreements dated April 11, 2013.

Xueshan Yang and Hongcheng Technology Equity Pledge Agreements.  As security for Mr. Yang’s obligations under call option agreements and shareholder voting rights entrustment agreements with Hongcheng Technology and Hongcheng Education’s obligations under the technical consulting and services agreement with Hongcheng Technology, Mr. Yang pledged all of his equity interests in Hongcheng Education and all distributions arising from those interests to Hongcheng Technology under equity pledge agreements dated April 16, 2013.

Power of Attorney by Changqing Xie and Xueshan Yang.  For purposes of securing their performance under the various agreements that they have entered into with us and Hongcheng Technology, both Mr. Xie and Mr. Yang have irrevocably appointed Hongcheng Technology as their attorneys-in-fact and have authorized Hongcheng Technology to take all actions on their behalf (as shareholders of Hongcheng Education) that are deemed appropriate by Hongcheng Technology.

Hongcheng Technology and Hongcheng Education Exclusive Technical Consulting and Services Agreement.  In July 2007, we, through our wholly owned subsidiary Hongcheng Technology, entered into an exclusive technical consulting and services agreement with Hongcheng Education. Under this agreement, Hongcheng Technology provides courseware and product development services, website design services, maintenance and security services, employee training services and any other services that may be agreed upon by the parties to Hongcheng Education. As consideration for these services Hongcheng Education pays Hongcheng Technology a service fee equal to 80% of its annual gross revenue.

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Fees and Expenses

Fees and expenses incurred or to be incurred by the Company and the Buyer Group in connection with the Merger are estimated at the date of this proxy statement to be as follows:

Description		Amount (in thousand USD)
Financing fees and expenses and other professional fees		$	340
Legal fees and expenses		$	875
Independent Committee fees		$	61
Miscellaneous (including accounting, filing fees, printer, proxy solicitation and mailing costs, ADS cancellation and surrender fees)		$	433
Total		$	1,709

These expenses will not reduce the merger consideration to be received by the Company’s shareholders and ADS holders. If the Merger is consummated, the party incurring any costs and expenses in connection with the Merger and the Merger Agreement shall pay such costs and expenses.

Voting by the Buyer Group at the Extraordinary General Meeting

Pursuant to the Voting Agreement, each of the Rollover Shareholders has agreed to (i) appear or otherwise cause the Voting Shares to be counted as present for purpose of calculating a quorum at any meeting of the Company’s shareholders where any vote, consent or other approval is taken in respect of the Merger Agreement and ensure that any vote at such meeting be a poll vote, (ii) vote or otherwise cause to be voted all of his, her or its Voting Shares (x) in favor of the approval of the Merger Agreement and the transactions contemplated thereby and any related action reasonably required in furtherance thereof, (y) against any other acquisition proposal, (z) against any action, agreement or transaction that is intended, that could reasonably be expected, or the effect of which could reasonably be expected, to materially impede, interfere with, delay or postpone, discourage or adversely affect the Merger Agreement or the transactions contemplated thereby, and (iii) not enter into at any time prior to the termination of the Voting Agreement, any voting trust agreement or any other contract (other than the Contribution Agreement) with respect to any Voting Shares.

Litigation Related to the Merger

We are not aware of any lawsuit that challenges the Merger, the Merger Agreement or any of the transactions contemplated thereby.

Accounting Treatment of the Merger

The Merger is expected to be accounted for, at historical cost, as a Merger of entities under common control in a manner similar to a pooling-of-interests, in accordance with Accounting Standards Codification 805-50, “Business Combinations — Related Issues”.

Regulatory Matters

The Company does not believe that any material federal or state regulatory approvals, filings or notices are required in connection with the Merger other than the approvals, filings or notices required under the federal securities laws and the filing of the Cayman Plan of Merger (and supporting documentation as specified in the Cayman Companies Law) with the Cayman Islands Registrar of Companies and in the event the Merger becomes effective, a copy of the certificate of merger being given to the shareholders and creditors of the Company and Merger Sub as at the time of the filing of the Cayman Plan of Merger and notice of merger published in the Cayman Islands Gazette.

Dissenters’ Rights

Please see “Dissenters’ Rights — Requirements for Exercising Dissenters’ Rights” beginning on page 95.

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Material U.S. Federal Income Tax Consequences

The following is a discussion of material U.S. federal income tax consequences to U.S. Holders (defined below) of ADSs or ordinary shares upon the exchange of ADSs or ordinary shares for cash pursuant to the Merger or pursuant to the exercise of Dissenters’ Rights (as described under “Dissenters’ Rights” below). This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury regulations, administrative rulings, and decisions thereunder as of the date hereof, and such authorities are subject to differing interpretations and may be replaced, revoked, or modified, possibly with retroactive effect.

This discussion is for information purposes only and does not discuss all aspects of U.S. federal income taxation that may be relevant to particular holders in light of their individual circumstances, including holders subject to special tax rules (for example, banks, financial institutions, insurance companies, regulated investment companies, mutual funds, real estate investment trusts, brokers or dealers in securities or currencies, traders in securities that elect mark-to-market treatment, partnerships (or other entities treated as partnerships for U.S. federal income tax purposes) and their partners, tax-exempt organizations (including private foundations), certain former citizens or residents of the United States, non-U.S. holders, holders who own (directly, indirectly, or constructively) 10% or more of the our voting shares, holders who acquired (or have the right to acquire) ADSs or ordinary shares pursuant to any employee share option or incentive plan or otherwise as compensation, holders that hold ADSs or ordinary shares as part of a straddle, hedge, conversion transaction, constructive sale or other integrated transaction for U.S. federal income tax purposes, retirement plans, individual retirement accounts or other tax-deferred accounts, persons subject to alternative minimum tax or holders that have a functional currency other than the United States dollar), all of whom may be subject to tax rules that differ significantly from those summarized below. This discussion only addresses the U.S. federal income tax consequences to U.S. Holders of the Merger and the exercise of Dissenters’ Rights and does not address any tax consequences of transactions effected prior to, concurrently with, or after the Merger (whether or not any such transactions are undertaken in connection with the Merger), including, without limitation, the acquisition by Holdings of the Rollover Shares from the Rollover Shareholders. This discussion also does not discuss any consequences to holders that will directly or indirectly hold an ownership interest in Holdings or the Company after the Merger, or to holders of Company Options or Company RSUs. This discussion assumes that holders hold their ADSs or ordinary shares as “capital assets” (generally, property held for investment) within the meaning of Section 1221 of the Code.

In addition, this discussion does not discuss any aspect of state, local, or non-U.S. tax law, or any tax considerations other than U.S. federal income tax considerations. Each U.S. Holder is urged to consult its tax advisor regarding the U.S. federal, state, local, and non-U.S. income and other tax considerations of the exchange of ADSs or ordinary shares for cash pursuant to the Merger or pursuant to the exercise of Dissenters’ Rights.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of ADSs or ordinary shares that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or incorporated under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person for U.S. federal income tax purposes.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of ADSs or ordinary shares, the U.S. federal income tax treatment of the partnership and its partners generally will depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner of a partnership holding ADSs or ordinary shares, the U.S. Holder is urged to consult its tax advisor regarding the exchange of ADSs or ordinary shares for cash pursuant to the Merger or pursuant to the exercise of Dissenters’ Rights.

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U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER AND THE EXERCISE OF DISSENTERS’ RIGHTS IN LIGHT OF THEIR PARTICULAR SITUATIONS, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL, NON-U.S., AND OTHER TAX LAWS.

Consequences of Participation in the Merger or an Exercise of Dissenters’ Rights

A U.S. Holder that receives cash in exchange for its ADSs or ordinary shares, either as consideration in the Merger or, in the case of a holder of ordinary shares (including any ADS holder that elects to first exchange its ADSs for ordinary shares), as a result of such U.S. Holder exercising its Dissenters’ Rights (as described under “Dissenters’ Rights” below), will generally recognize gain or loss in an amount equal to the difference between (i) the amount of cash received and (ii) such U.S. Holder’s adjusted tax basis in the ADSs or ordinary shares exchanged therefor. Subject to the discussion under “Passive Foreign Investment Company” below, such recognized gain or loss will generally be capital gain or loss, and will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the ADSs or ordinary shares exchanged is greater than one year at the time of such exchange. Long-term capital gains of non-corporate U.S. Holders are currently subject to U.S. federal income tax at a reduced rate. The ability to use any capital loss to offset other income or gain is subject to certain limitations under the Code. If a U.S. Holder acquired different blocks of ADSs or ordinary shares at different times or different prices, such U.S. Holder must determine the adjusted tax basis and holding period separately with respect to each such block of ADSs or ordinary shares.

Any such gain or loss recognized by U.S. Holders will generally be treated as U.S. source gain or loss. If, as described under “Special Factors — Material PRC Income Tax Consequences” below, we are deemed to be a PRC “resident enterprise” under the PRC tax law, and gains from the disposition of the ADSs or ordinary shares are subject to tax in the PRC, a U.S. Holder may be eligible for the benefits of the income tax treaty between the United States and the PRC (the Agreement Between the Government of the United States of America and the Government of the People’s Republic of China for the Avoidance of Double Taxation and the Prevention of Tax Evasion With Respect to Taxes on Income, referred to as the “Treaty”). In such event, if PRC tax were to be imposed on any gain from the disposition of the ADSs or ordinary shares, a U.S. Holder that is eligible for the benefits of the Treaty may be able to elect to treat the gain as PRC source income for U.S. foreign tax credit purposes. U.S. Holders are urged to consult their tax advisors regarding the tax consequences if PRC tax is imposed on gain on a disposition of ADSs or ordinary shares, including the availability of the foreign tax credit under their particular circumstances.

Passive Foreign Investment Company

A non-U.S. corporation, such as the Company, will be treated as a “passive foreign investment company” (a “PFIC”), for U.S. federal income tax purposes, if, in any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the quarterly average of its assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and a company’s unbooked intangibles associated with active business activities may generally be categorized as active assets. In estimating the value of its unbooked intangibles, the Company has taken into account its market capitalization. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. For purposes of the PFIC rules, a non-U.S. corporation generally will be treated as owning a proportionate share of the assets and income of any other corporation in which it owns, directly or indirectly, more than 25% (by value) of the stock.

Based upon an analysis of the income and assets of the Company and its subsidiaries, we do not believe that we were a PFIC for our taxable year ended December 31, 2013, or any prior taxable year, and we do not believe we will be a PFIC for the current taxable year. Because PFIC status is a fact-intensive determination made on an annual basis, however, no assurance can be given that we have not been or will not become classified as a PFIC.

If we are a PFIC for the current taxable year or have been a PFIC during any prior year in which a U.S. Holder held ADSs or ordinary shares and, in the case of a holder of ADSs, the U.S. Holder has not made a valid mark-to-market election with respect to such holder’s ADSs any gain recognized by a U.S. Holder on the disposition of ADSs or ordinary shares generally would be allocated ratably over such U.S. Holder’s

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holding period for the ADSs or ordinary shares. The amount allocated to the taxable year of the disposition and to any taxable year before we became a PFIC would be treated as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for that year and the interest charge generally applicable to underpayments of tax would be imposed on the resulting tax attributable to each such year. If a U.S. Holder has made a valid mark-to-market election with respect to its ADSs, any gain the U.S. Holder recognizes would be treated as ordinary income and any loss would be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election.

If we are a PFIC for the current taxable year or have been a PFIC during any prior year in which a U.S. Holder held ADSs or ordinary shares, a U.S. Holder generally would be required to file IRS Form 8621 with respect to the disposition of the ADSs or ordinary shares. The PFIC rules are complex, and each U.S. Holder is urged to consult its tax advisor regarding the applicable consequences to it if we are a PFIC or have been a PFIC during any prior year in which the U.S. Holder held ADSs or ordinary shares.

Information Reporting and Backup Withholding

A U.S. Holder may be subject, under certain circumstances, to information reporting and backup withholding with respect to the amount of cash received in the Merger. Under the backup withholding rules, a U.S. Holder may be subject to backup withholding unless the U.S. Holder is an exempt recipient and, when required, demonstrates this fact or provides a taxpayer identification number, makes certain certifications on IRS Form W-9, and otherwise complies with the applicable requirements. A U.S. Holder that does not provide its correct taxpayer identification number may also be subject to penalties imposed by the IRS.

Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. Holder’s U.S. federal income tax liability, if any, provided that the required procedures are followed. U.S. Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining such an exemption.

Material PRC Income Tax Consequences

Under the EIT Law, which took effect on January 1, 2008, enterprises established outside of China whose “de facto management bodies” are located in the PRC are considered “resident enterprises”, and thus will generally be subject to the enterprise income tax at the rate of 25% on their global income. On December 6, 2007, the State Council adopted the Regulation on the Implementation of PRC Enterprise Income Tax Law, effective as of January 1, 2008, which defines the “de facto management body” as an establishment that has substantial management and control over the business, personnel, accounts and properties of an enterprise. Under the EIT Law and its implementation regulations, PRC income tax at the rate of 10% is applicable to any gain recognized on receipt of cash by a “non-resident enterprise” from transfer of its equity in a PRC resident enterprise. Although there has not been a definitive determination of the Company’s status by the PRC tax authorities, the Company does not believe that it should be considered a resident enterprise under the EIT Law or that the gain recognized on the receipt of cash for our Shares or ADSs should otherwise be subject to PRC tax to holders of such shares and ADSs that are not PRC residents.

In addition, under the Circular on Strengthening the Administration of Enterprises Income Tax on Non-resident Enterprises’ Equity Transfer Income (“Circular 698”, Guo Shui Han 2009 No. 698), issued by the State Administration of Taxation, which became effective as of January 1, 2008, if the non-resident enterprise indirectly holds and transfers equity of a PRC resident enterprise held through an offshore holding company, which was located in a tax jurisdiction that: (a) has an effective tax burden less than 12.5% or (b) does not tax foreign income of its residents, the non-resident enterprise shall be required to file with the relevant taxation authorities certain information about the transfer. Where any such taxation authorities, upon review and examination of the documents submitted by the non-resident enterprise, consider that the non-resident enterprise has adopted an abusive arrangement in order to avoid PRC tax, they will disregard the existence of the overseas holding company and re-characterize the offshore share transfer transaction and as a result, gains derived from such offshore share transfer transaction may be subject to PRC withholding tax at the rate of up to 10%. There is uncertainty as to the application of Circular 698. While it appears that Circular 698 was not intended to apply to stock transfers of publicly traded companies and does not apply to individual transferors, there is very little guidance and practical experience regarding its application. Circular 698 may be

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determined by the tax authorities to be applicable to the Merger where non-resident corporate shareholders or ADS holders were involved, if the Company is determined by the PRC tax authorities to lack reasonable commercial purpose. As a result, the non-resident corporate shareholders or ADS holders may become at risk of being taxed under Circular 698. You should consult your own tax advisor for a full understanding of the tax consequences of the Merger to you, including any PRC tax consequences.

Material Cayman Islands Tax Consequences

The Cayman Islands currently have no form of income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. No taxes, fees or charges will be payable (either by direct assessment or withholding) to the government or other taxing authority in the Cayman Islands under the laws of the Cayman Islands in respect of the Merger or the receipt of cash for our Shares and ADSs under the terms of the Merger. This is subject to the qualification that (i) Cayman Islands stamp duty may be payable if any transaction documents are brought to or executed or produced before a court in the Cayman Islands; and (ii) registration fees will be payable to the Registrar of Companies to register the Cayman Plan of Merger.

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MARKET PRICE OF THE ADSS, DIVIDENDS AND OTHER MATTERS

Market Price of the ADSs

Our ADSs, each representing three of our ordinary shares, have been listed on NASDAQ since December 14, 2007. Our ADSs trade under the symbol “CEDU.” For the period from December 14, 2007, the date of our initial public offering, to the date of this proxy statement, the trading price of our ADSs on NASDAQ has ranged from $2.97 to $9.15 per ADS. The following table provides the high and low trading prices for our ADSs on NASDAQ for each quarter during the past two years:

		Trading Price
		High US$				Low US$
Quarterly Highs and Lows
January 1 – March 31, 2012			7.85				5.69
April 1 – June 30, 2012			7.35				5.25
July 1 – September 30, 2012			6.47				4.05
October 1 – December 31, 2012			6.45				4.20
January 1 – March 31, 2013			8.36				5.08
April 1, 2013 – June 30, 2013			7.10				4.99
July 1, 2013 – September 30, 2013			7.69				6.02
October 1, 2013 – December 31, 2013			7.18				6.20
January 1, 2014 – March 14, 2014			6.85				6.85

On June 19, 2013, the last trading day prior to the announcement by the Company’s board of directors on June 20, 2013 that it had received a “going private” proposal, the reported closing sales price of our ADSs as quoted by NASDAQ was $5.84 per ADS. The proposed merger consideration of $7.00 per ADS, or $2.33 per Share, represents a premium of approximately 19.9% to the closing trading price of $5.84 per ADS, or $1.95 per Share, on June 19, 2013 and a premium of 16.9% and 13.9% over the Company’s volume-weighted average price as quoted by NASDAQ over the 30 and 60 trading days prior to June 20, 2012, respectively. On March 14, 2014, the most recent practicable date before the printing of this proxy statement, the high and low reported sales price of our ADSs was US$6.85 and US$6.85 per ADS, respectively, or US$2.28 and US$2.28  per Share. You are urged to obtain a current market price quotation for your ADSs in connection with voting your Shares.

Dividend Policy

Since the incorporation of our company in 1999, we have not declared or paid any dividends on our ordinary shares or ADSs. We have no present plan to declare or pay any dividends on our ordinary shares or ADSs in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

We are a holding company incorporated in the Cayman Islands. Although we have not received any to date, we may in the future rely on dividends from our subsidiaries in the PRC. Current PRC regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our subsidiaries in the PRC are required to set aside a certain amount of their accumulated after-tax profits each year, if any, to fund certain statutory reserves. These reserves may not be distributed as cash dividends. Further, if our subsidiaries in the PRC incur debt on their own behalf, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

Under the previous PRC tax law, dividend payments to foreign investors made by foreign investment enterprises, such as our PRC subsidiaries, were exempt from PRC withholding tax. Pursuant to the Enterprise Income Tax Law that became effective on January 1, 2008, as well as the related implementation rules and other recently issued regulations, dividends payable by a foreign investment enterprise to its foreign investors are subject to a 10% withholding tax (unless the foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement). Distributions made from pre-January 1, 2008 retained earnings will not be subject to the withholding tax.

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Our board of directors has complete discretion as to whether to distribute dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, our general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends, we will pay our ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the Deposit Agreement, including the fees and expenses payable thereunder. Cash dividends on our ADSs and ordinary shares, if any, will be paid in U.S. dollars.

THE EXTRAORDINARY GENERAL MEETING

The Company is furnishing this proxy statement to you, as a holder of the Company’s Shares or ADSs, as part of the solicitation of proxies by the Company’s board of directors for use at the extraordinary general meeting described below.

Date, Time and Place of the Extraordinary General Meeting

The Company will hold the extraordinary general meeting (the “EGM”) on April 18, 2014, at 2:00 p.m., (Beijing time), at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China.

Proposals to be Considered at the Extraordinary General Meeting

At the meeting, you will be asked to consider and vote upon the following resolutions:

THAT the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, be authorized, approved and authorized by the Company.

THAT the directors and officers of the Company be and are hereby authorized to do all things necessary to give effect to the Merger Agreement and the Cayman Plan of Merger; and

THAT, the chairman of the extraordinary general meeting be instructed to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

In addition to being proposed and voted on as a special resolution, the resolutions set out in paragraph 1 above will also be proposed to and voted on by all shareholders other than the Rollover Shareholders (as defined in the Merger Agreement) present and voting in person or by proxy as a single class at the EGM. It is a requirement of the Merger Agreement that the Merger cannot be completed unless such resolution is approved by shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the EGM.

If the Merger is completed, each Share issued and outstanding immediately prior to the effective time of the Merger, other than the Excluded Shares and the Dissenting Shares, shall be cancelled in exchange for the right to receive the per Share merger consideration of $2.33 per Share in cash without interest. Each ADS issued and outstanding immediately prior to the effective time of the Merger, other than ADSs representing the Excluded Shares and Dissenting Shares, will be cancelled in exchange for the right to receive the per ADS merger consideration of $7.00 per ADS in cash without interest pursuant to the terms and conditions set forth in the Merger Agreement. At the effective time of the Merger, all of the Shares will cease to be outstanding, shall be cancelled and shall cease to exist. Each Share (other than the Excluded Shares and the Dissenting Shares) will thereafter represent only the right to receive the per Share merger consideration without interest, and each Dissenting Shares will thereafter represent only the right to receive the payment resulting from the procedures set forth in Section 238 of the Cayman Companies Law.

The Rollover Shares outstanding immediately prior to the effective time of the Merger will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value

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$0.001 per share, of Holdings and be cancelled and cease to exist at the effective time of the Merger. At the effective time of the Merger, each ordinary share, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the effective time of the Merger will be converted into one fully paid and non-assessable ordinary share, par value $0.001 per share, of the Surviving Corporation.

Our Board’s Recommendation

Our board of directors, acting upon the unanimous recommendation of the Independent Committee:

Record Date; Shares and ADSs Entitled to Vote

You are entitled to vote at the EGM if you own Shares at the close of business in the Cayman Islands on March 31, 2014, the Share record date for voting at the EGM. If you own Shares at the close of business in the Cayman Islands on the Share record date, the deadline for you to lodge your proxy card and vote is April 17, 2014 at 5:00 p.m. (Beijing time). If you own American depositary shares of the Company (“ADSs”) representing Shares, you cannot vote at the EGM directly, but you may instruct The Bank of New York, the ADS Depositary, as the holder of the Shares underlying the ADSs, how to vote the Shares underlying your ADSs. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to vote the underlying Shares at the EGM. Alternatively, you may vote at the EGM if you surrender your ADSs to the ADS Depositary, pay the ADS cancellation fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that you have not given, and will not give, voting instructions as to the ADSs before the close of business in New York City on March 26, 2014, and become a holder of Shares by the close of business in the Cayman Islands on March 31, 2014. In addition, if you hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the EGM. Each outstanding Share on the record date entitles the holder to one vote on each matter submitted to the shareholders for approval at the EGM and any adjournment or postponement thereof. See “Procedures for Voting” below.

Quorum

A quorum of the Company’s shareholders is necessary to have a valid shareholders’ meeting. Two shareholders entitled to vote and present in person or by proxy or, in the case of a shareholder being a corporation, by its duly authorized representative and representing not less than one-third in nominal value of the total issued voting Shares in the Company throughout the meeting will constitute a quorum for the EGM. The Company expects, as of the Share record date, there will be Shares entitled to be voted at the EGM. In the event that a quorum is not present at the EGM, the Company currently expects that it will adjourn or postpone the EGM to solicit additional proxies in favor of the adoption of the Merger Agreement.

Vote Required

Under the Cayman Companies Law and the Merger Agreement, in order for the Merger to be completed, the Merger Agreement and the Cayman Plan of Merger must be approved by (i) a special resolution approved

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by an affirmative vote of shareholders representing two-thirds or more of the Shares present and voting in person or by proxy as a single class at the extraordinary general meeting, and (ii) a resolution approved by an affirmative vote of shareholders (other than the Rollover Shareholders) representing a majority of the outstanding Shares (excluding the Shares held by the Rollover Shareholders) present and voting in person or by proxy as a single class at the extraordinary general meeting. If this vote is not obtained, the Merger will not be completed.

Pursuant to the Merger Agreement, Holdings shall use its reasonable best efforts to cause all of the Voting Shares to (i) appear at the EGM (including any adjournments or postponement thereof) or otherwise be counted as present thereat for purposes of determining whether a quorum is present and (ii) be voted in favor of the authorization and approval of the Merger Agreement and the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger.

The Rollover Shareholders, as a group, beneficially owns 18,500,962 Shares as of the date of this proxy statement, which represents approximately 61.6% of the total outstanding Shares, including Company Options and Company RSUs exercisable within 60 days of the date of this proxy statement. Pursuant to the terms of the Merger Agreement and the Voting Agreement, 14,125,801 of these Shares, representing 55.0% of the total outstanding Shares, will be voted in favor of the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the transactions completed thereby, including the Merger, at the EGM.

Procedures for Voting

Shares

Only shareholders entered in the register of members of the Company at the close of business in the Cayman Islands on March 31, 2014, the Share record date, will receive the final proxy statement and proxy card directly from the Company. Shareholders registered in the register of members of the Company as of the Share record date or their proxy holders are entitled to vote and may participate in the EGM or any adjournment or postponement thereof. Each Share carries one vote. Shareholders intending to vote by proxy should submit their proxy in accordance with the instructions set forth on the proxy card as promptly as possible. The deadline to lodge the proxy card is April 17, 2014 at 5:00 p.m. (Beijing time).

Shareholders who hold their Shares in “street name,” meaning in the name of a bank, broker or other person who is the record holder, must either direct the record holder of their Shares how to vote their Shares or obtain a proxy from the record holder to vote their Shares at the extraordinary general meeting.

Shareholders who have questions or requests for assistance in completing and submitting proxy cards should contact the Company by calling +86 10 8418 6655 or mailing ChinaEdu Corporation at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China.

ADSs

If you own American depositary shares of the Company (“ADSs”) representing Shares, you cannot vote at the EGM directly, but you may instruct The Bank of New York, the ADS Depositary, as the holder of the Shares underlying the ADSs, how to vote the Shares underlying your ADSs. The ADS Depositary must receive such instructions no later than 5:00 p.m. (New York City time) on April 15, 2014 in order to vote the underlying Shares at the EGM. Alternatively, you may vote at the EGM if you surrender your ADSs to the ADS Depositary, pay the ADS Depositary’s fees required for such surrender, provide instructions for the registration of the corresponding Shares, and certify that you have not given, and will not give, voting instructions as to the ADSs before the close of business in New York City on March 26, 2014, and become a holder of Shares by the close of business in the Cayman Islands on March 31, 2014. In addition, if you hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the EGM. The ADS Depositary shall endeavor, in so far as practicable, to vote or cause to be voted the shares represented by ADSs in accordance with your voting instructions. In addition, if you hold your ADSs through a broker, bank or nominee, you must rely on the procedures of the financial intermediary through which you hold your ADSs if you wish to vote at the EGM.

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If you wish to cancel your ADSs, you need to make arrangements to deliver your ADSs to the ADS Depositary for cancellation prior to the close of business in New York City on March 26, 2014, together with (1) delivery instructions for the corresponding Shares (name and address of person who will be the registered holder of the Shares) and (2) payment of the ADS cancellation fees (up to $0.05 per ADS to be cancelled) and related expenses and taxes (such as stamp taxes and stock transfer taxes). If you hold your ADSs in a brokerage, bank or nominee account, please contact your broker, bank or nominee to find out what actions you need to take to instruct the broker, bank or nominee to cancel the ADSs on your behalf. Upon cancellation of the ADSs, the ADS depositary will arrange for The Hong Kong and Shanghai Banking Corporation Limited, the custodian holding the Shares, to transfer registration of the Shares to you. If you cancel your ADSs and vote your Shares at the EGM, any instruction to the ADS Depositary on how to vote those ADSs will be disregarded.

If the ADS Depositary timely receives valid voting instructions from an ADS holder which fail to specify the manner in which the ADS Depositary is to vote the Shares represented by ADSs held by such ADS holder, such ADS holder is deemed to have instructed the ADS Depositary to vote FOR the proposal to approve the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the extraordinary general meeting in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received at the time of the extraordinary general meeting to pass the special resolutions to be proposed at the extraordinary general meeting.

Voting of Proxies and Failure to Vote

All Shares represented by valid proxies will be voted at the EGM in the manner specified by the holder. If a shareholder returns a properly signed proxy card but does not indicate how the shareholder wants to vote, Shares represented by that proxy card will be voted FOR the proposal to approve the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated thereby, including the Merger, FOR the proposal to authorize the directors and officers of the Company to do all things necessary to give effect to the Merger Agreement, and FOR the proposal to instruct the chairman of the extraordinary general meeting to adjourn or postpone the EGM in order to allow the Company to solicit additional proxies in the event that there are insufficient proxies received to pass the special resolutions during the EGM unless the shareholder appoints a person other than the chairman of the meeting as proxy, in which case the Shares represented by that proxy card will be voted (or not submitted for voting) as the proxy determines. If a shareholder fails to vote by proxy or in person, it will be more difficult for the Company to obtain the necessary quorum to transact business at the EGM and to obtain required votes described in “Vote Required.”

Brokers or other nominees who hold the Company’s Shares in “street name” for customers who are the beneficial owners of such Shares may not give a proxy to vote those customers’ Shares in the absence of specific instructions from those customers. Broker non-votes will be counted toward a quorum but will not be treated as voted at the EGM.

Banks, brokers and other nominees who hold the Company’s ADSs in “street name” for their customers do not have discretionary authority to provide the ADS Depositary with voting instructions on how to vote the Shares underlying the ADSs with respect to the adoption of the Merger Agreement. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owner of the Company’s ADSs, they may not provide the ADS Depositary with voting instructions on how to vote the Shares underlying the ADSs with respect to the adoption of the Merger Agreement.

Revocability of Proxies

Registered holders of our Shares may revoke their proxies in one of three ways:

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If a shareholder holds Shares through a broker and has instructed the broker to vote the shareholder’s Shares, the shareholder must follow directions received from the broker to change those instructions.

Holders of the Company’s ADSs may revoke their voting instructions by notification to the ADS Depositary in writing at any time no later than      p.m. (New York City time) on            , 2014. A holder of the Company’s ADSs can do this in one of two ways:

If you hold your ADSs through a broker, bank or nominee and you have instructed your broker, bank or nominee to give ADS voting instructions to the ADS Depositary, you must follow the directions of your broker, bank or nominee to change those instructions.

Rights of Shareholders Who Dissent from the Merger

Shareholders who elect to dissent from the Merger will have the right to receive payment of the fair value of their Shares if the Merger is completed, but only if they deliver to the Company, before the vote is taken at the EGM, a written objection to the Merger and subsequently comply with all procedures and requirements of Section 238 of the Cayman Companies Law for the exercise of dissenters’ rights, which is attached as Annex C to this proxy statement. The fair value of their Shares as determined under that statute could be more than, the same as, or less than the merger consideration they would receive pursuant to the Merger Agreement if they do not exercise dissenters’ rights with respect to their Shares.

ADS HOLDERS WILL NOT HAVE THE RIGHT TO EXERCISE DISSENTERS’ RIGHTS AND TO RECEIVE PAYMENT OF THE FAIR VALUE OF THE SHARES UNDERLYING THEIR ADSs. THE ADS DEPOSITARY WILL NOT ATTEMPT TO EXERCISE ANY DISSENTERS’ RIGHTS WITH RESPECT TO ANY OF THE SHARES THAT IT HOLDS, EVEN IF AN ADS HOLDER REQUESTS THE ADS DEPOSITARY TO DO SO. ADS HOLDERS WISHING TO EXERCISE DISSENTERS’ RIGHTS MUST SURRENDER THEIR ADSs TO THE ADS DEPOSITARY, PAY THE ADS DEPOSITARY’S FEES REQUIRED FOR THE CANCELLATION OF THE ADSs, PROVIDE INSTRUCTIONS FOR THE REGISTRATION OF THE CORRESPONDING SHARES, AND CERTIFY THAT THEY HAVE NOT GIVEN, AND WILL NOT GIVE, VOTING INSTRUCTIONS AS TO THE ADSs (OR, ALTERNATIVELY, THAT THEY WILL NOT VOTE THE SHARES) BEFORE THE CLOSE OF BUSINESS IN NEW YORK CITY ON MARCH 26, 2014, AND BECOME HOLDERS OF SHARES BY THE CLOSE OF BUSINESS IN THE CAYMAN ISLANDS ON MARCH 31, 2014. THEREAFTER, SUCH FORMER ADS HOLDERS MUST COMPLY WITH THE PROCEDURES AND REQUIREMENTS FOR EXERCISING DISSENTERS’ RIGHTS WITH RESPECT TO THE SHARES UNDER SECTION 238 OF THE CAYMAN COMPANIES LAW.

Whom to Call for Assistance

If you need assistance, including help in changing or revoking your proxy, you can contact the Company by calling +86 10 8418 6655 or mailing ChinaEdu Corporation at 4^th Floor-A, GeHua Building, No. 1 Qinglong Hutong, Dongcheng District, Beijing, 100007, The People’s Republic of China.

Solicitation of Proxies

The Company will ask banks, brokers and other custodians, nominees and fiduciaries to forward the Company’s proxy solicitation materials to the beneficial owners of the Company’s Shares or ADSs held of

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record by such nominee holders. The Company will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners and in obtaining voting instructions from those beneficial owners. In addition, proxies may be solicited by mail, in person, by telephone, by internet or by facsimile by certain of the Company’s officers, directors and employees. These persons will receive no additional compensation for solicitation of proxies but may be reimbursed for reasonable out-of-pocket expenses. The Company will pay all expenses of filing, printing and mailing this proxy statement.

Other Business

The Company is not currently aware of any business to be acted upon at the EGM other than the matters discussed in the notice convening the meeting.

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THE AGREEMENT AND PLAN OF MERGER

The following is a summary of the material terms and conditions of the Merger Agreement. The description in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read the Merger Agreement and the Cayman Plan of Merger carefully and in their entirety because those are the legal documents that govern the Merger. Factual disclosures about the Company contained in this proxy statement or in the Company’s public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the Merger Agreement and described in this summary.

Structure and Completion of the Merger

The Merger Agreement provides for the Merger of Merger Sub with and into the Company upon the terms, and subject to the conditions, of the Merger Agreement. If the Merger is completed, the Company will cease to be a publicly traded company. The closing will occur on the first business day immediately after all of the closing conditions have been satisfied or waived. At the closing, Merger Sub and the Company will execute a plan of merger and file the plan of merger and other related documents with the Registrar of Companies of the Cayman Islands. The Merger will become effective at the date agreed by Holdings and the Company as specified in the plan of merger in accordance with the Cayman Companies Law.

We expect that the Merger will be completed during the first half of 2014, after all conditions to the Merger have been satisfied or waived. We cannot specify when, or assure you that, all conditions to the Merger will be satisfied or waived. However, we intend to complete the Merger as promptly as practicable.

Memorandum and Articles of Association; Directors and Officers of the Surviving Corporation

At the effective time of the Merger, the memorandum and articles of association of Merger Sub then in effect at the effective time of the Merger will be the memorandum and articles of association of the Company as the Surviving Corporation (except that at the effective time of the Merger, Article I of the memorandum and articles of association of the Surviving Corporation will be amended to be and read as follows: “The name of the company is ChinaEdu Corporation”) until thereafter changed or amended as provided therein or by applicable law. The rights and restrictions attached to the shares in the capital of the Surviving Corporation will be set out in the memorandum and articles of association thereof.

Unless otherwise determined by Holdings prior to the effective time of the Merger, the directors of Merger Sub immediately prior to the effective time of the Merger will become the directors of the Surviving Corporation immediately following the Merger and the officers of the Company immediately prior to the effective time of the Merger will remain the officers of the Surviving Corporation. Promptly following the Merger, McGraw-Hill Education will have the right to designate one or more members to the Surviving Corporation’s Board, and each committee thereof, as is proportionate to its equity ownership in the Surviving Corporation.

Merger Consideration

Each Share issued and outstanding immediately prior to the effective time of the Merger, other than the Excluded Shares and the Dissenting Shares, will be cancelled and converted into and exchanged for the right to receive $2.33 and each ADS, each representing three Shares, will be cancelled in exchange for the right to receive $7.00, in each case, in cash, without interest and net of any applicable withholding taxes.

Each of the Rollover Shares outstanding immediately prior to the effective time of the Merger will, in accordance with the Contribution Agreement, be exchanged for the right to subscribe for the ordinary shares, par value $0.001 per share, of Holdings and will be cancelled and cease to exist at the effective time of the Merger.

Each of the Company Treasury Shares will, by virtue of the Merger and without any action on the part of its holder, cease to be outstanding and will be cancelled and cease to exist without payment of any consideration or distribution therefor. Each ADS that represents a Rollover Share or Company Treasury Share immediately prior to the effective time of the Merger shall be surrendered to the ADS Depositary for

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cancellation without payment of any consideration or distribution therefor, and each of such Rollover Shares and such Company Treasury Shares underlying such cancelled ADS shall be treated the same as above.

Each Dissenting Share will be entitled to receive only the payment resulting from the procedures set forth in Section 238 of the Cayman Companies Law.

At the effective time of the Merger, each issued and outstanding ordinary share, par value $0.001 per share, of Merger Sub will be converted into one fully paid and non-assessable ordinary share, par value $0.001 per share, of the Surviving Corporation.

The merger consideration will not be paid to shareholders who are untraceable unless and until they notify the paying agent appointed by Holdings of their current contact details prior to the effective time of the Merger. A shareholder will be deemed to be untraceable if (a) he has no registered address in the register of members (or branch register) maintained by the Company, or (b) on the last 2 consecutive occasions on which a dividend has been paid by the Company a cheque payable to such shareholder either (i) has been sent to such shareholder and has been returned undelivered or has not been cashed, or (ii) has not been sent to such shareholder because on an earlier occasion a cheque for a dividend so payable has been returned undelivered, and in any such case no valid claim in respect thereof has been communicated in writing to the Company, or (c) notice of the extraordinary general meeting convened to vote on the Merger has been sent to such shareholder and has been returned undelivered. Any monies due to dissenting shareholders and shareholders of the Company who are untraceable will be returned to the Surviving Corporation on demand and held by the Surviving Corporation in a separate non-interest bearing bank account for the benefit of holders of Dissenting Shares and shareholders of the Company who are untraceable. Monies unclaimed after a period of 7 years from the date of the notice of the extraordinary general meeting will be forfeited and will revert to the Surviving Corporation. Dissenting shareholders and shareholders of the Company who are untraceable who subsequently wish to receive any monies otherwise payable in respect of the Merger within applicable time limits or limitation period should contact the Surviving Corporation.

Treatment of Company Options and Company RSUs

As of the date of this proxy statement, there were outstanding and unexercised Company Options for purchases of an aggregate of 6,638,890 Shares. At the effective time of the Merger, each Company Option will be cancelled and converted into and exchanged for the right to receive a Holdings Option. Each Holdings Option shall have an exercise or purchase price equal to the exercise or purchase price of the corresponding Company Option. Each Holdings Option shall otherwise retain the same grant date, the same vesting or exercise schedule, the same term and expiration date and substantially the same other material terms and conditions as each Company Option.

As of the date of this proxy statement, there were outstanding 3,241,000 Company RSUs. At the effective time of the Merger, each Company RSU shall be cancelled and converted into and exchanged for a Holdings RSU. Each Holdings RSU shall be subject to the same material terms and conditions as each Company RSU.

Exchange Procedures

Prior to the effective time of the Merger, Holdings will enter into an agreement with a bank, trust company or other entity to serve as paying agent with respect to the Merger. At the effective time of the Merger, Holdings will deposit with the paying agent for the benefit of the holders of Shares and ADSs, the exchange fund sufficient for the paying agent to make payments under the Merger Agreement. Promptly after the effective time of the Merger, the paying agent will deliver or mail to each registered holder of Shares (other than holders of the Excluded Shares and Dissenting Shares and the ADS Depositary) (i) a letter of transmittal specifying how the delivery of the merger consideration to registered holders of the Shares will be effected and (ii) instructions for effecting the surrender of share certificates in exchange for the per Share merger consideration. If you have lost a share certificate, or if it has been stolen or destroyed, then before you will be entitled to receive the per Share merger consideration, you will have to make an affidavit of loss, theft or destruction, and if reasonably required by Holdings or the paying agent, post a bond in a customary amount as indemnity against any claim that may be made against it or the Surviving Corporation with respect to such share certificate. Upon the surrender of any share certificates (or an affidavit and indemnity of loss in lieu of share certificates) together with a duly completed and validly executed letter of transmittal, each registered

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holder of Shares (other than holders of the Excluded Shares and Dissenting Shares) represented by such share certificates and each registered holder of Shares (other than holders of the Excluded Shares and the Dissenting Shares) which are not represented by share certificates will receive an payment in an amount equal to (a) the number of Shares held multiplied by (b) the per Share merger consideration, without interest and net of any applicable withholding taxes. The share certificate so delivered will be marked as cancelled.

Meanwhile, promptly after the effective time of the Merger, the paying agent will transmit to the ADS Depositary a cash amount equal to (a) the number of ADSs issued and outstanding (other than the ADSs representing the Excluded Shares and the Dissenting Shares) multiplied by (b) the per ADS merger consideration. The ADS Depositary will distribute the per ADS merger consideration for the ADSs to ADS holders pro rata to their holdings of ADSs, without interest and net of any applicable withholding taxes, upon delivery by them of the ADSs.

In the event that a transfer of ownership of Shares is not registered in the register of members of the Company, or if the per Share merger consideration is to be paid in a name other than that in which the relevant Shares are registered in the register of members of the Company, the per Share merger consideration may be paid to a person other than the person in whose name the relevant Share is registered in the register of members of the Company only upon delivery of evidence to the satisfaction of the paying agent of such person’s entitlement to the relevant Share and if the person requesting such payment has paid to the paying agent any transfer taxes required by reason of the payment of the per Share merger consideration to a person other than the registered holder of such Shares, or established to the satisfaction of the paying agent that such transfer taxes have been paid or are otherwise not payable.

Representations and Warranties

The Merger Agreement contains representations and warranties made by the Company to Holdings and Merger Sub and representations and warranties made by Holdings and Merger Sub to the Company, in each case, as of specific dates. The statements embodied in those representations and warranties were made for purposes of the Merger Agreement and are subject to important qualifications and limitations agreed by the parties in connection with negotiating the terms of the Merger Agreement (including the disclosure schedules delivered by the Company in connection therewith but not reflected in the Merger Agreement). In addition, some of those representations and warranties were made as of a specific date, may be subject to a contractual standard of materiality different from that generally applicable to shareholders, may have been made for the principal purposes of establishing the circumstances in which a party to the Merger Agreement may have the right not to close the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement rather than establishing matters as facts. The representations and warranties made by the Company were qualified by the public disclosures of the Company and its subsidiaries with the SEC since December 10, 2010 and prior to the date of the Merger Agreement and a disclosure schedule delivered by the Company to Holdings and Merger Sub prior to or simultaneously with the execution of the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which does not purport to be accurate as of the date of this proxy statement, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement.

The representations and warranties made by the Company to Holdings and Merger Sub include representations and warranties relating to, among other things:

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Many of the representations and warranties made by the Company in the Merger Agreement are qualified as to “Material Adverse Effect.” For purposes of the Merger Agreement, a “Material Adverse Effect” means any development, fact, circumstance, condition, event, change, occurrence or effect, individually or in the

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aggregate, that would have or would reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, other than, subject to certain qualifications, any development, fact, circumstance, condition, event, change, occurrence or effect resulting from:

The representations and warranties made by Holdings and Merger Sub to the Company include representations and warranties relating to, among other things:

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Conduct of Business Prior to Closing

Under the Merger Agreement, the Company has agreed that, subject to certain exceptions in the Merger Agreement, from the date of the Merger Agreement until the earlier of the effective time of the Merger or the termination of the Merger Agreement, the Company will, and will cause each of its subsidiaries to, carry on its business in the ordinary course of business consistent with past practice, and use reasonable best efforts to preserve substantially intact its business organizations and capital structure, maintain in effect all material licenses and permits required for its businesses, keep available the services of its present officers and key employees, maintain its present relationships with those with which it have significant business relationships. Subject to certain exceptions set forth in the Merger Agreement and the disclosure schedule of the Company delivered in connection with the Merger Agreement or required by law or regulation, unless Holdings otherwise consents in writing (which consent cannot be unreasonably withheld, conditioned or delayed), the Company will not and will not permit its subsidiaries to, among other things:

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Shareholders’ Meeting

Unless the Merger Agreement is terminated, the Company is required to take all action necessary to convene an extraordinary general meeting of its shareholders to consider and vote upon the authorization and approval of the Merger Agreement, the Cayman Plan of Merger and the transactions contemplated therein, including the Merger, as promptly as reasonably practicable after the SEC confirms that it has no further comments on the Schedule 13E-3 and this proxy statement.

Subject to the provisions of the Merger Agreement discussed under “No Solicitation of Company Acquisition Proposals and No Change of Recommendation” below, the board of directors of the Company will recommend the approval of the Merger Agreement by the Company’s shareholders.

No Solicitation of Company Acquisition Proposals and No Change of Recommendation

Until the effective time of the Merger or, if earlier, the termination of the Merger Agreement, the Company, its subsidiaries and their respective representatives may not: