Casino operator Penn Entertainment says it went through multiple rounds of discussions with activist investor HG Vora Capital Management in an effort to avoid what it called a “costly and distracting proxy fight.” As part of that effort, the company offered to immediately appoint two HG Vora-backed candidates, Johnny Hartnett and Carlos Ruisanchez, to its board.
In a letter sent to shareholders on Tuesday (Apr. 29), and cited by Next.io, Penn laid out its side of the story as tensions with HG Vora continue to rise.
According to Penn, despite offering to nominate Hartnett and Ruisanchez based on their qualifications and experience, HG Vora turned down the proposal. HG Vora, Penn says, insisted that a deal would only be possible if all three of its nominees, Hartnett, Ruisanchez, and William J. Clifford was appointed. Clifford is the former CFO of Penn National Gaming and Gaming and Leisure Properties, Inc (GLPI).
Alternatively, HG Vora wanted Penn to appoint two nominees and publicly commit to reviewing its strategy on things like capital allocation, asset configuration, the competitive landscape, and potential consolidation opportunities. Penn is said to have argued that because of gaming regulations, it cannot legally agree to changes that would alter its governance structure, which it said limited its ability to meet HG Vora’s demands.
Led by Parag Vora, the company has been highly critical of Penn’s strategic decisions, especially its investment in online gaming. The group argues that Penn squandered nearly $4 billion trying to break into the online sports betting market, most recently through its operation of the ESPN Bet website.
HG Vora said it believes these missteps have left Penn’s shares significantly undervalued. They have also taken aim at Penn’s executive compensation, calling it “excessive” given the company’s performance.
HG Vora calls Penn Entertainment board decision ‘self-serving’
The situation escalated even further when, on Friday (Apr. 25), Penn’s Board announced it would reduce the number of board seats up for election at the upcoming Annual Meeting from three seats to two.
$PENN Resignations and Elections:
On April 25, 2025, PENN Entertainment, Inc. reported that Ronald J. Naples resigned from the Board, and Barbara Kohn and Saul Reibstein will not seek reelection; this led to the Board being reduced from nine to eight members. The company…
— SEC Filings Digest (@USCorpFilings) April 28, 2025
HG Vora quickly fired back, calling the move “self-serving” and accusing Penn’s leadership of trying to entrench itself at the expense of shareholder rights. In a statement, the firm said: “HG Vora believes the Board’s self-serving action, taken in the face of the prospect of losing three Board seats, had no legitimate corporate purpose and deprives shareholders of their fundamental right to elect directors of their choosing.”
HG Vora also pointed out that Penn had faced similar issues with state law during the 2024 election cycle when it initially had too few directors up for election.
HG Vora had formally notified Penn back in January 2025 that it intended to nominate three directors, following more than a year of work to ensure it complied with gaming regulations in more than 20 states.
The firm says that it believes that all three candidates were essential to bringing accountability back to Penn’s board and to correcting what it describes as years of poor decisions and missed opportunities. HG Vora stated: “Because it is unclear if the Company’s stated intention on Friday will persist, HG Vora will nominate its three candidates and solicit votes on their behalf.”
Even though Penn later announced it would nominate Hartnett and Ruisanchez, HG Vora pointed out that the Board’s position had shifted multiple times, creating uncertainty about its real intentions.
HG Vora to file statement with SEC
Because of this, HG Vora confirmed it will move forward with filing a preliminary proxy statement with the US Securities and Exchange Commission (SEC) and plans to solicit votes for all three of its nominees. It also pointed out the experience that Clifford, the former CFO of Penn National Gaming and GLPI, would bring to the board.
Both sides are now gearing up for a major showdown that could reshape Penn’s board and future direction when shareholders cast their votes at the Annual Meeting on June 17, 2025.
ReadWrite has reached out to Penn Entertainment and HG Vora for comment.
Featured image: PENN Entertainment / HG Vora
