Vora Blasts Penn After Company Cuts Number of Director Nominations

Posted on: April 28, 2025, 03:12h. 

Last updated on: April 28, 2025, 07:04h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Penn appeared poised to nominate three of investor’s proposed directors, not just two
  • Investor claims gaming company is violating shareholder voting rights
  • HG Vora says it will proceed with proxy fight

The soap opera between HG Vora and Penn Entertainment (NASDAQ: PENN) took another turn Monday with the hedge fund accusing the regional casino operator of potentially violating investor voting rights after it reduced the number Vora-backed candidates to be nominated to the board to two from three.

Vora
HG Vora founder Parag Vora. The hedge fund is accusing Penn Entertainment of going back on an agreement to nominate three of its proposed board candidates. (Image: LinkedIn)

Last Friday, the gaming company issued a statement telling investors it will nominate two of Vora’s preferred candidates — Johnny Hartnett, and Carlos Ruisanchez — to its board of directors. Excluded from the group was William Clifford, who was part of the trio Vora nominated in January. Penn’s decision to not let Clifford stand for a vote is curious particularly when considering his background. He was previously a Penn executive who held high-level roles at Pinnacle Entertainment, which was acquired by Penn seven years ago.

That’s not lost on the money manager, which said it forge ahead with a plan to bring all three candidates up for nomination to the Penn board.

Just ten days prior, the Board expressed an entirely different intention, to nominate three different candidates,” according to a statement issued by the investor. “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.”

Vora claimed that on April 15, it was notified by Penn in writing that it would hold an election for three board seats at its upcoming annual meeting.

Vora Not Afraid to Knock Penn Director Slate

After it initiated a stake in Penn in December, Vora said the composition of the gaming company’s board violated Pennsylvania corporate law. The money manager said today that situation was fixed only after the timeframe in which to nominate new directors passed. Vora added that Penn is disenfranchising investors.

“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,” according to the press release.

The investor — one of Penn’s largest — has consistently warned it’s prepared to wage a proxy fight against the gaming company to bring all three of its nominees before investors. Vora is making good on that pledge, noting today that it has filed proxy battle paperwork with the Securities and Exchange Commission (SEC).

“On the morning of April 25, 2025, representatives of PENN and HG Vora discussed how best to fill the three available Board seats,” the shareholder said in the statement. “HG Vora’s representative reiterated HG Vora’s belief that all three of its candidates would be successfully elected to the Board by PENN’s shareholders if the proxy contest went to a final vote. Later that same day, PENN’s Board announced the extraordinary action, in the midst of the proxy contest, of reducing the number of Board seats to be filled at the Annual Meeting.”

Penn Faces Clifford Conundrum

When it said it would allow Hartnett and Ruisanchez to be nominated to the board, Penn was clear to note it hadn’t reached a firm agreement with Vora, but added it “remains focused on realizing the significant value creation opportunity across the business” and that it wants to avoid a proxy fight.

Now it appears as though the gaming company invited the proxy fight of which it was warned and one it may have difficulty in winning. As for creating shareholder value, it’s hard to argue adding Clifford to the board would stand in the way of that goal and it may be even more difficult to convince other investors of him being a hindrance to that objective.

“Clifford, would be a valuable addition to the Board of PENN,” notes Vora. “Rather than continuing to waste shareholder capital and corporate resources on entrenching the Board in the name of ‘activism defense,’ PENN should welcome Mr. Clifford to the Board and work with its financial advisors to consider all options to maximize shareholder value.”