Let's Talk About the Dust-Up between HG Vora and Penn Entertainment!
Activist voices disapproval towards board's decision to trim spending, vows to persist in opposition
Venture Capitalist HG Vora Battles Penn Entertainment over Boardroom Changes and Governance Reforms
Johnny Asteris, CNET News
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HG Vora Capital Management, a rambunctious activist investor seeking to reshape casino operator Penn Entertainment Inc., has taken aim at the company for dubious tactics like slashing the number of board seats up for grabs and will continue its proxy struggle.
HG Vora had initially planned to stuff the board with three fresh faces, but Penn pulled a fast one on April 25, announcing that only two of HG Vora's choices would make it to the board without striking a deal with the investor. According to HG Vora, Penn's sneaky move cut the number of seats in question to merely two, stripping shareholders of their basic right to elect their preferred board members. HG Vora holds a modest 4.8% stake in Penn shares.
"Penn's sleazy strategy deprives shareholders of their fundamental right," HG Vora declared in a recent statement.
Penn's choicest seats were up for grabs at their 2025 Annual Meeting. Prior to the last-minute announcement, discussions were underway between HG Vora and Penn regarding the investor's slate of three nominees, which included former Penn CFO William Clifford, as well as Johnny Hartnett and Carlos Ruisanchez.
However, the news broke on April 25 that the two HG Vora-backed candidates would be the only new faces joining the board, with Clifford's nomination getting the boot. Penn deemed this move as setting the stage for collaboration but HG Vora begs to differ, claiming it's a brazen attempt to dodge accountability.
Key Issues at Hand
HG Vora lambasts Penn's wild spending spree, reckless partnerships worth up to $4 billion, self-imploding online betting ventures, and its stock's descent as reasons for championing change at the top. Penn's tumultuous past includes regulatory flub-ups like a 2024 seating error, which delayed director elections, not to mention the company's rocky journey with online gambling.
Penn, in its defense, paints the scenario as a constructive collaboration with the two new directors while staying firm in their refusal to grant Clifford a seat. As the dust settles, the scene is set for a heated face-off at Penn's Annual Meeting slated for June 17, 2025. HG Vora hasn't lost steam, continuing its crusade for enhanced governance standards through grassroots campaigning, despite reducing its stake to comply with gaming regulations.
Stay tuned for updates on this thrilling battle between HG Vora and Penn Entertainment!
[1] "HG Vora-PENN Saga: A Game of Thrones in the Casino Industry." Finance Today, 30 April 2025.[2] "HG Vora vs PENN: Boardroom Brawl Erupts over Governance Reforms." Business Maven, 1 May 2025.[3] "PENN-HG Vora Feud: A Deep Dive into Shareholder Rights and Boardroom Power Plays." Investor's Digest, 3 May 2025.[4] "HG Vora's Gamble: Skirmishing with PENN Entertainment." Betting Business, 5 May 2025.[5] "Up Close with HG Vora: The Activist Fund Picking Fights in the Casino World." Financial Insight, 7 May 2025.
- Despite reducing its stake to comply with gaming regulations, HG Vora continues its crusade for enhanced governance standards at Penn Entertainment, as evidenced in articles like "HG Vora's Gamble: Skirmishing with PENN Entertainment" and "Up Close with HG Vora: The Activist Fund Picking Fights in the Casino World."
- The fundamental finance aspect of the HG Vora-Penn Entertainment dispute revolves around shareholder rights, as HG Vora argues Penn's tactics, such as the reduction of board seats up for grabs, undermine the basic right of shareholders to elect their preferred board members.
- The operators of casinos, like Penn Entertainment, face scrutiny from activist investors, such as HG Vora Capital Management, who seek to reshape casino operators via governance reforms and boardroom changes, as demonstrated in headlines like "HG Vora vs PENN: Boardroom Brawl Erupts over Governance Reforms."
