Penn issues prickly response to prior HG Vora criticism

The organization has denounced HG Vora’s ‘reckless approach’ in its recent shareholder letter.

In the latest instalment of the pair’s ongoing disagreements, Penn Entertainment has issued a letter to its shareholders condemning HG Vora’s ‘reckless approach,’ labelling its recent actions as a ‘blunderbuss campaign.’ 

Contextually, HG Vora currently owns an 18.5% interest in Penn Entertainment, making it one of the company’s largest shareholders. As part of this latest address, Penn has provided a detailed timeline pertaining to ongoing negotiations between the pair around board seats. Indeed, HG Vora nominated three potential candidates to be added to the Penn Board of Directors, which – according to Penn – were entered into consideration.  

Also specified by Penn, a total of eight meetings were held regarding this matter as an attempt to reach an agreeable resolution. However, tempers began to flare on the side of HG Vora when Penn made the choice to change the total number of board seats up for election from three down to two – stating that the organization was in breach of its fiduciary duties and that the move was ‘self-serving.’ 

Subsequently, last week, HG Vora sued Penn Entertainment over the matter, claiming that the operator has not complied with federal securities law – and is now looking to invalidate the reduction of board seats.  

Good to know: The shareholder address vigorously underlines Penn’s role in pioneering digital gaming – suggesting that online vs retail could be a key factor in the pair’s disagreement 

This evaluation is further exemplified by the section of Penn’s shareholder letter which calls HG Vora CFO Bill Clifford’s competency into question. Listing several reasons as to why Clifford has been repeatedly rejected from joining the Penn board, the operator states that (among other things) he, “lacks the digital gaming and online sports betting experience – areas essential to the future of Penn’s business and the industry.“ 

The letter, signed off by the Penn Entertainment Board of Directors, concluded with the following statement, “The Board and management team are committed to acting in the best interest of our Company and shareholders. We continue to take action to drive growth, expand margins, improve cash flow generation and accelerate capital return to shareholders. 

“We recognize there is more work to be done, but our business has strong momentum, and we are confident in the direction we are headed. We look forward to updating you on our progress as we continue to execute on our plan to generate significant value. Thank you for your continued support of and investment in Penn.” 

Will Underwood

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