Houghton Mifflin Harcourt Company

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Ademi LLP is investigating HMH (NASDAQ: HMHC) for possible breaches of fiduciary duty and other violations of law in its transaction with Veritas.

Ademi LLP alleges HMH’s financial outlook and prospects are excellent and yet HMH shareholders will receive only $21 in cash per share through a tender offer. The per share purchase price represents a 36% premium to HMH’s share price as of January 13, 2022 and implies an equity value of approximately $2.8 billion. The merger agreement unreasonably limits competing bids for HMH by prohibiting solicitation of further bids, and imposing a significant penalty if HMH accepts a superior bid. HMH insiders will receive substantial benefits as part of change of control arrangements.

We are investigating the conduct of HMH’s board of directors, and whether they are (i) fulfilling their fiduciary duties to all shareholders, and (ii) obtaining a fair and reasonable price for HMH.