Penn Entertainment fired back at activist investor HG Vora as the two engage in a battle of presentations, accusing its third-largest shareholder of “consistent disregard for regulators.”
A presentation titled, “Penn Entertainment: The Facts” followed a 116-slide effort by HG Vora, which is trying to convince shareholders to vote for a third nominee to Penn’s board at the ESPN Bet operator’s annual meeting on June 17. At eight slides, Penn’s response was much shorter than Vora’s broadside.
Penn claims that the board seat Vora wants “does not exist,” after it shrunk the size of its board from nine members to eight, which would allow only two of Vora’s nominees to the board to be elected. HG Vora considers this movement a violation of “core shareholders’ rights” and is suing to have votes cast at the annual meeting for its third nominee — former Penn CFO William Clifford — counted.
‘False claims and mischaracterizations’
HG Vora’s extensive presentation accused Penn of utilizing the wrong strategy with its digital division, making misguided acquisitions, and failing to deliver shareholder returns. It also argued that top executives including CEO Jay Snowden were overpaid and used company planes as a “personal Uber service.”
Penn’s response claims that Vora’s presentation was “full of false claims and mischaracterizations.”
“Despite touting its ‘deep experience investing in the casino and online gaming sectors,’ HG Vora appears unfamiliar with the established gaming regulatory framework,” Penn’s presentation said. “HG Vora has demonstrated consistent disregard for regulators, violated institutional investor waivers and pushed for governance changes despite express prohibitions from state gaming regulators.”
Penn went on to address the claims about private plane usage, stating that only 1.5% of total flight hours for its planes was for personal use.
With regard to the modest performance of ESPN Bet so far, Penn said that there were “levers it could pull to optimize performance into 2026 and realize value.”
Vora wants change in digital strategy
HG Vora’s attempt to add three new members to Penn’s board stems from a wider disagreement about the operator’s digital strategy. Vora sees Penn’s forays into sports betting as a “complete failure” and has called for the operator to sell its sports betting arm.
Disappointed by Penn’s share performance in recent years — the stock is down almost 90% since its peak in 2021 — the activist investor has also called for management to increase returns to shareholders with a buyback. Penn argues that the buyback would push lease-adjusted credit ratios to an “unsustainable” level.
Vora has also suggested that Snowden could be removed as Penn’s boss. It said the Penn board should “carefully review Mr. Snowden’s track record and performance and consider whether his contract should be renewed.”
