Penn Entertainment Nominates HG Vora’s Picks Amid Proxy Push
Penn Entertainment announced plans to nominate Johnny Hartnett and Carlos Ruisanchez, both proposed by activist investor HG Vora, to its board of directors.
A Strategic Board Shake-Up
The move, following talks with HG Vora, aims to dodge a costly proxy fight ahead of the June 2025 annual meeting. With HG Vora’s sharp criticism of Penn’s online betting flops, like Barstool Sportsbook and ESPN Bet, the nominations signal a pivot for the U.S. iGaming market player.
HG Vora, once holding 18.5% of Penn’s shares in 2023, cut its stake below 5% to ease regulatory hurdles across Penn’s 28 jurisdictions.
The fund’s push for board seats reflects frustration with Penn’s 87% stock drop since 2021. “To date, there have been no repercussions for the board’s persistent bad judgment and disappointing shareholder returns,” said Parag Vora, HG Vora’s founder.
The nominations, excluding HG Vora’s third pick, William Clifford, leave room for further clashes.
HG Vora’s Criticisms
HG Vora has blasted Penn’s “abject failure” in online betting, pointing to the $551 million Barstool Sportsbook buy, sold back for $1 in 2023, and ESPN Bet’s 3% market share.
The fund claims Penn’s $4 billion in “reckless” acquisitions, including the $2 billion theScore deal, tanked shareholder value. With Penn’s $1.64 billion Q3 2024 revenue marred by a $90.9 million interactive loss, HG Vora’s gripes resonate.
The fund also slammed Penn’s governance, alleging violations of Pennsylvania’s 1988 Business Corporation Law and the company’s own charter.
HG Vora argues the board’s “weak” structure entrenches directors and overpays CEO Jay Snowden, despite an 81% stock decline versus Boyd Gaming’s 73% gain.
Penn’s board, now at eight with seven independents, sees Ron Naples retire immediately, while Barbara Shattuck Kohn and Saul Reibstein won’t seek re-election. Hartnett, ex-CEO of Superbet and a 20-year Flutter veteran, brings digital betting chops, having grown Superbet’s revenue sevenfold.
Ruisanchez, former Pinnacle Entertainment CFO, drove Penn’s $2.8 billion acquisition of Pinnacle in 2018. Their expertise aligns with Penn’s interactive segment, which lost $90.9 million in Q3 2024.
By nominating HG Vora’s picks, Penn aims to harness their “critical expertise” without a formal deal. The decision sidesteps a proxy battle that could cost $5 million. Yet, HG Vora’s push for Clifford suggests lingering tension.
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