PENN Entertainment Rebuffs HG Vora’s Push, Slamming Investor’s Strategy
PENN Entertainment has countered HG Vora’s activist demands with a settlement offer and board nominations, while rejecting disruptive proposals, as detailed in its shareholder letter, sparking a lawsuit from the investor.
A Tense Standoff
PENN Entertainment is holding its ground against activist investor HG Vora, offering to appoint two of its board candidates while rejecting a third and slamming its strategic demands, per the company’s shareholder letter.
“The PENN Board and management team are committed to acting in the best interest of our Company and shareholders,” PENN stated, detailing over 25 meetings with HG Vora since 2023.
PENN’s dialogue with HG Vora has been robust, with “more than 25 meetings or calls” and a 90-minute board presentation in September 2023, the letter revealed.
“Between March 25, 2025, and April 24, 2025, we held eight meetings with HG Vora’s representatives, to attempt to reach a mutually agreeable resolution,” PENN noted, even entering a confidentiality agreement to share financial insights.
When HG Vora nominated three candidates in January 2025, PENN swiftly included them in its director search, conducting “thorough and extensive interviews with each HG Vora candidate.”
The company proposed a settlement on April 24, 2025, to “appoint two of HG Vora’s candidates – Johnny Hartnett and Carlos Ruisanchez – to serve as directors,” but HG Vora rejected it the next day, insisting on all three or additional governance changes.
Why Bill Clifford Was Rejected
PENN greenlit Hartnett and Ruisanchez, finding them “value-additive to the Board,” but rejected HG Vora’s third candidate, Bill Clifford, deeming him “unsuited for the PENN Board.”
The letter cited multiple reasons: Clifford’s 2020 board candidacy was denied, his skills “were not determined to be additive or complementary,” and he “failed to demonstrate the base level of open-mindedness” in interviews.
As PENN’s former CFO, Clifford “advocated against key initiatives” like IT modernization and loyalty programs. His tenure at Drive Shack Inc. drew criticism, with ISS recommending shareholders withhold votes due to “material governance failures.”
PENN also noted Clifford “lacks digital gaming and online sports betting experience,” critical for its future. “Five years later, our conclusion regarding Mr. Clifford remains the same,” PENN affirmed.
Slamming HG Vora’s Strategy
HG Vora’s strategic demands: a 50% leveraged buyback, pausing retail projects in Illinois, Ohio, and Nevada, and a public strategic review, were labeled “short-sighted and self-serving” by PENN.
“These short-sighted and self-serving proposals would destroy significant shareholder value,” the letter argued, warning of unstable debt and stunted growth.
PENN also accused HG Vora of “flagrant disregard for the views and directives of state gaming authorities,” noting its push for governance changes without licenses violated regulations.
“HG Vora’s efforts to influence the Company’s operations and strategy and nominate directors were improper and impermissible,” PENN stated, citing a 2024 SEC fine of $950,000 against HG Vora for securities violations.
HG Vora’s lawsuit, filed in Pennsylvania, claims PENN illegally cut a board seat, escalating tensions.
PENN’s board, committed to “ongoing Board refreshment,” stands by its strategy, with Hartnett and Ruisanchez on its slate. “The PENN Board continues to consider opportunities to further refresh the Board,” the letter emphasized,
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