HG Vora responds to Penn Entertainment’s ‘self-serving’ tactic in board election
Investor points out legal and governance impact of Penn Entertainment’s latest board decision
Key points:
– HG Vora claims Penn’s board unlawfully cut the number of director elections from three to two
– HG Vora will move forward with plans to nominate three candidates
HG Vora Capital Management has issued a statement following Penn’s decision on 25 April to reduce the number of board seats up for election at its 2025 Annual Meeting from three to two.
According to HG Vora, the reduction has no legitimate corporate basis and prevents shareholders from exercising their full voting rights. The firm suggests the move was timed to avoid a contested election in which all three HG Vora nominees were likely to be successful.
HG Vora had formally notified Penn in January of its intention to nominate three candidates (Johnny Hartnett, Carlos Ruisanchez and William Clifford) after more than a year of work to meet regulatory requirements in various gaming jurisdictions.
On 15 April, Penn confirmed that three seats would be open for election. However, on 25 April, following a discussion between representatives of HG Vora and Penn, the company announced it would be reducing the number of available board positions to two.
HG Vora also pointed to a previous election cycle in 2024, during which Penn reportedly didn’t comply with Pennsylvania law regarding director terms and board class sizes.
Good to know: HG Vora asserts that its third candidate, William Clifford, would bring important financial and governance experience to the board
Despite the Board’s new intention to nominate two of HG Vora’s candidates, the investor will proceed with nominating all three. It is filing a preliminary proxy statement with the US Securities and Exchange Commission.
This isn’t the first time HG Vora has challenged Penn’s boardroom decisions. Remember when the firm made a formal request to appoint directors to Penn Entertainment’s board in December 2023? Now, it’s turning its attention to Penn’s latest move to reduce board seats.
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