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  "documentTitle": "Engine Capital Houghton Mifflin Harcourt Presentation March 2022",
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  "presentationDate": "2022-03-01 00:00:00",
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  "pageNumber": 21,
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  "notes": "The slide serves as a concluding summary of the investment thesis.",
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      "text": "A superior plan exists for shareholders. Houghton Mifflin should execute a Dutch tender offer between $21 and $22 per share for 19% of its shares outstanding. Assuming management's projections, Engine believes this plan could result in a share price around $42 at the end of 2024, implying a 26% 3-year IRR for remaining shareholders",
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      "text": "The Veritas offer undervalues HMHC. It implies Veritas is buying HMHC for 7.6x 2024 unlevered free cash flow (UFCF) and 6.2x 2024 UFCF if the cumulative cash flow is included. This offer also represents a very small premium vs. where the stock would be after the announcement of strong Q4 results. Applying a 30% change of control premium to that stock price points to a fair transaction value of $25.35 per share. Recent comparable deals point to a $25 per share transaction value for HMHC",
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      "text": "Under most circumstances, Veritas will earn outsized returns from this transaction. Under management's forecast, Veritas is set to earn a 5-year IRR between 31% and 37% at the $21 per share deal price. These outsized IRRs are further evidence of the inappropriateness of the $21 Veritas offer and simply represent a transfer of value from HMHC shareholders to Veritas",
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      "text": "This offer is a result of a flawed process conducted by Evercore. We believe Evercore is conflicted, and its fairness opinion is filled with mistakes",
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      "text": "Veritas can pay a significantly higher price and still generate a 5-year IRR above 17.5%. Under management's forecast, Veritas could pay $26 per share and still earn a 5-year IRR between 18% and 23%",
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      "text": "Conclusion",
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