Activist Hedge Fund HG Vora Blasts Penn Entertainment Over Potential Board Appointment Without Vote
Activist investor HG Vora is once again challenging Penn Entertainment, this time over concerns that the casino and entertainment company may move to appoint a new board member without shareholder approval following its June 17 annual meeting.
A Letter Sparks Concern
The controversy began with a letter Penn sent to shareholders on May 15, in which it mentioned ongoing efforts to “refresh the Board,” possibly with shareholder input. However, HG Vora interpreted the comment as a signal that Penn intends to unilaterally appoint a new director after the meeting—someone who wouldn’t be subject to a shareholder vote.
Just weeks earlier, Penn had agreed to add two nominees backed by HG Vora—Johnny Hartnett and Carlos Ruisanchez—to its board. At the same time, three current board members, Barbara Shattuck Kohn and Saul Reibstein (both choosing not to seek re-election), and Ron Naples (retiring), will be stepping down.
HG Vora Raises the Alarm
Despite gaining two board seats, HG Vora remains wary of Penn’s next steps.
“Penn’s statement suggests that it is going to expand the Board by adding back the seat it removed last month and unilaterally name a director of its choosing for a three-year term — all after the 2025 Annual Meeting,” the hedge fund stated.
HG Vora called the move “self-serving” and accused Penn of attempting to bypass shareholder oversight by appointing a director without a vote. The firm criticized the plan as having “no legitimate corporate purpose” and condemned it for “depriving shareholders of the right to vote or oppose the nomination.”
“This is simply unacceptable and should not be tolerated,” HG Vora said in its statement.
Rejected Nominee, Legal Action
Tensions further escalated when Penn declined to accept HG Vora’s proposed third candidate, William Clifford, a veteran executive with ties to the company. The board argued that Clifford did not bring complementary experience and claimed he lacked “the open-mindedness needed to create value for investors.”
In response, HG Vora filed a federal lawsuit earlier this month, accusing Penn of reducing the number of available board seats for election—from three to two—in an effort to block all of HG Vora’s nominees from being seated.
The hedge fund stated that it deliberately chose not to seek a preliminary injunction, explaining that it didn’t want to provide Penn with an excuse to delay the annual meeting and obstruct the appointment of Hartnett and Ruisanchez.
Ongoing Frustration Over Governance
HG Vora also took issue with Penn’s broader strategy and performance, accusing the company of lagging behind its industry peers and stating that the current board has “forfeited the right to select directors” independently, especially without shareholder input.
As the shareholder meeting approaches, the conflict between the activist investor and Penn Entertainment continues to intensify, drawing attention to governance practices at one of North America’s most prominent casino and gaming operators.
- SCCG Management. The Gambling Industry’s Global Connector. Access Here.
- Source: SCCGManagement.com