According to a regulatory filing to the Securities and Exchange Commission (SEC) on December 28, HG Vora Capital Management is seeking seats on Penn Entertainment’s Board of Directors.
A major shareholder in the company, the investment firm is founded by Parag Vora, a former VP at Goldman Sachs.
HG Vora has requested rights to appoint directors to the Board ahead of the opportunity to nominate new board members ahead of the 2024 meetings from Jan 8 through Feb 7. It is unclear how many seats the hedge fund is seeking.
In the 13D filing to the SEC, HG Vora expressed concern over Penn Entertainment’s capital allocation and undervalued stock: "Given the persistent underperformance of the Common Stock and the Issuer’s capital allocation track record, amongst other areas of concern, the Reporting Persons have requested that the Issuer afford them the right to designate highly qualified directors who would be committed to working with the Issuer’s management and fellow Board members to help the Issuer realize its full potential.”
The situation is similar to that of Entain, which recently saw stocks rise after involvement from activist investors – as well as after the departure of its CEO Jette Nygaard-Andersen.
Penn Entertainment's stock saw a decline of approximately 16% throughout 2023. Yet this potential move has caused a 6.3% soar since the announcement.
In August this year, Penn partnered with ESPN to launch ESPN Bet in a 10-year agreement. The media giant’s venture into online sports betting via Penn started its rollout in recent months, and will continue its launch across North American states next year.
