Penn Entertainment has escalated its ongoing feud with major shareholder HG Vora, calling out the investment firm for what it describes as a “reckless approach” and accusing it of launching a “blunderbuss campaign” in a letter sent directly to shareholders.
Good to know
- HG Vora holds an 18.5 percent stake in Penn Entertainment.
- The dispute centers on board seat nominations and digital strategy.
- HG Vora has filed a lawsuit over alleged securities law violations.
Tensions flared after HG Vora, which owns nearly one-fifth of the company, nominated three candidates for Penn’s Board of Directors. According to Penn, those names were taken seriously, and eight meetings were held to find a solution. But the situation turned after Penn reduced the number of board seats up for election from three to two.
That decision drew backlash from HG Vora, which claimed Penn was acting in its own interest and breaching its fiduciary duties. HG Vora responded by filing a lawsuit last week, accusing Penn of violating federal securities laws and demanding that the seat reduction be overturned.
Disagreement tied to online gaming vision
Underlying the dispute is a possible difference in vision for the company’s future. Penn’s letter emphasizes its push into digital gaming and sports betting. The company suggests that HG Vora’s picks for the board, particularly CFO Bill Clifford, lack experience in the online gambling sector.
Penn stated plainly that Clifford “lacks the digital gaming and online sports betting experience – areas essential to the future of Penn’s business and the industry.”
The company’s leadership team also used the letter to defend its strategic direction, pointing to recent momentum in its business. It maintained that decisions being made are focused on shareholder value and long-term growth.
The letter, signed by Penn’s Board of Directors, closed with a message intended to reassure investors. “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.”
It added, “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.”
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