Yup, the e in « que » is one that can be contracted and disappears entirely just like those in le, de, me, and so on. This leaves qu’ exactly equivalent to k, no questions asked.

qu’eux /kø/

qu’elle /kɛl/

qu’on /kɔ̃/

qu’à /ka/

And so on. Unlike the usual « e muet », this is not even a sound that can be expanded if needed, for example to fit a melody or a poetic meter. Edit: However, according to jlliagre, it’s possible to avoid making the contraction in the first place if you want to emphasize eux.

I think part of the oddness with qu’eux (which I find too) is the close acoustic fingerprint with que. Whereas que can’t sit in strong, stressed places in a sentence (except maybe in « ne … que »), qu’eux can, leading to what sounds like wrong stress and a premature end òf the sentence when the sounds are confused. Make sure you rhyme it with peu, not le.