Introductory Note
As previously disclosed on a Form 8-K filed with the Securities and Exchange Commission (“SEC”) on February 22, 2022, Houghton Mifflin Harcourt Company, a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger by and among the Company, Harbor Holding Corp., a Delaware corporation (the “Parent”), and Harbor Purchaser Inc., a Delaware corporation and a wholly owned subsidiary of the Parent (the “Purchaser”), and as previously disclosed on a Form 8-K filed with the SEC on March 23, 2022, the Company entered into Amendment No. 1 to such Agreement and Plan of Merger by and among the Company, the Parent and the Purchaser (such Agreement and Plan of Merger, as amended by such Amendment No. 1, the “Merger Agreement”). The Parent and the Purchaser are beneficially owned by The Veritas Capital Fund VII, L.P. (“Sponsor”).
Pursuant to the Merger Agreement, on March 7, 2022, the Purchaser commenced a cash tender offer (the “Offer”) for all of the Company’s outstanding shares of common stock, $0.01 par value per share (the “Common Stock”), at a price of $21.00 per share of Common Stock (the “Offer Price”).
The Offer, as extended, expired at one minute after 11:59 p.m., New York City time, on April 6, 2022 (the “Expiration Time”). Computershare Trust Company, N.A., in its capacity as depositary and paying agent for the Offer (the “Depositary and Paying Agent”), has advised the Company and the Purchaser that, as of the Expiration Time, 72,926,195 shares of Common Stock (excluding shares of Common Stock tendered pursuant to guaranteed delivery procedures that were not yet delivered in satisfaction of such guarantee) have been validly tendered and not properly withdrawn pursuant to the Offer, representing approximately 56.5% of the outstanding shares of Common Stock as of the Expiration Time. Accordingly, the Minimum Condition (as defined in the Merger Agreement) to the Offer has been satisfied. As a result of the satisfaction of the Minimum Condition and each of the other conditions to the Offer, on April 7, 2022, the Purchaser irrevocably accepted for payment all shares that were validly tendered, and not properly withdrawn, pursuant to the Offer. In addition, the Depositary and Paying Agent has advised the Company and the Purchaser that, as of the Expiration Time, 2,184,308 shares of Common Stock have been tendered by Notice of Guaranteed Delivery, representing approximately 1.7% of the issued and outstanding shares of Company Stock as of the Expiration Time. Payment for the shares of Common Stock accepted for payment pursuant to the Offer will be made today to the Depositary and Paying Agent, which will transmit such payments to tendering Company stockholders whose shares of Common Stock have been accepted for payment in accordance with the terms of the Offer.
As soon as practicable following the consummation of the Offer on April 7, 2022, pursuant to the terms of the Merger Agreement and in accordance with Section 251(h) of the Delaware General Corporation Law (the “DGCL”) and without a meeting or a vote of the Company’s stockholders, the Purchaser was merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of the Parent.
At the effective time of the Merger (the “Effective Time”) and as a result thereof, each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than (x) shares held by the Company or any of its wholly owned subsidiaries, including as treasury stock, or by the Parent or any of its wholly owned subsidiaries, including shares acquired by the Purchaser in the Offer, and (y) shares for which stockholders have properly exercised appraisal rights pursuant to Section 262 of the DGCL) was cancelled and converted automatically into the right to receive an amount in cash equal to the Offer Price, net of applicable withholding taxes and without interest.
Pursuant to the Merger Agreement, immediately prior to the consummation of the Offer, each outstanding Company Stock Option (as defined in the Merger Agreement) vested in full and was cancelled and converted into the right to receive a cash payment (subject to applicable withholding taxes) in an amount equal to the product of (i) the total number of shares of Common Stock then underlying such Company Stock Option multiplied by (ii) the excess, if any, of the Offer Price over the exercise price per share of such Company Stock Option. Also pursuant to the Merger Agreement, immediately prior to the consummation of the Offer, each outstanding Company RSU (as defined in the Merger Agreement) vested in full (including, in the case of any Company PRSU (as defined in the Merger Agreement), by virtue of the deemed achievement of any performance-based vesting conditions based on target performance) and was cancelled and converted into the right to receive right to receive a cash payment (subject to applicable withholding taxes) in an amount equal to the product of (i) the total number of shares of