Going Up Against Penn Entertainment: HG Vora's Persistent Proxy Fight
Activist condemns board's decision to reduce funds, vows continued opposition
(US, Casinos, Penn Entertainment, Personnel, Christopher Palmeri, Bloomberg)
Spread the word on this article
HG Vora Capital Management, a fearless investment firm pushing for modifications at casino titan Penn Entertainment Inc., chastised the company for decreasing the number of board seats available for election and announced the continuation of its proxy battle.
Initially, HG Vora had planned to nominate three individuals for the board of Penn, a gambling powerhouse heavily investing in online betting and engaged in negotiations with the company as recently as April 25. In a shocking turn of events, on the same day, Penn declared that two of HG Vora's chosen candidates would be included in the board nomination process without reaching an agreement with the investor.
HG Vora, in a bold statement released on May 2, asserted that Penn's actions unfairly lowered the number of board seats up for grabs to a mere two, thereby robbing shareholders of their fundamental right to elect directors. The investment firm holds a near 5% stake in Penn shares.
Here's a breakdown of the developing situation:
- Penn's Maneuver: Penn's Board slashed the number of board seats available for election from three to two on April 25, 2025. HG Vora perceives this move as self-serving and intended to bar the loss of three seats during the proxy contest[1][4].
- HG Vora's Stand: In the face of this reduction, HG Vora remains resolute in nominating three candidates: Johnny Hartnett, Carlos Ruisanchez, and William Clifford. HG Vora alleges that Penn violated shareholder voting rights by reneging on a plan to nominate three of its preferred candidates[4][5].
- Proxy Fight Escalation: HG Vora has vowed to persist with the proxy fight, emphasizing the need for enhanced oversight and accountability at Penn Entertainment. The hedge fund has filed a preliminary proxy statement with the Securities and Exchange Commission (SEC)[4][5].
- Penn's Reaction: Penn claims it offered various alternative plans to skirt a costly and distracting proxy fight. However, these attempts failed to reconcile the conflict[2].
Sources:
- Bloomberg News
- The Wall Street Journal
- HG Vora Capital Management Newsroom
- Business Insider
- Yahoo Finance
- HG Vora Capital Management, in the business of casino-and-gambling investments, is pushing for changes at casino-and-gambling giant Penn Entertainment Inc.
- The hedge fund has accused Penn Entertainment of violating fundamental finance principles by reducing the number of board seats available for election, which they believe is a self-serving move aimed at avoiding losing seats in the proxy fight.
- HG Vora has nominated three individuals for Penn's board, including Johnny Hartnett, Carlos Ruisanchez, and William Clifford, and has alleged that Penn violated shareholder voting rights by not agreeing to nominate three of HG Vora's preferred candidates.
- The proxy fight between HG Vora and Penn Entertainment is escalating, with the investment firm persisting with its fight, emphasizing the need for enhanced oversight and accountability at Penn Entertainment, and filing a preliminary proxy statement with the Securities and Exchange Commission (SEC).
