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NEW YORK - Investment firm HG Vora Capital Management, LLC, is taking legal action to ensure votes for its third director nominee, William Clifford, are counted at the upcoming annual meeting of PENN Entertainment, Inc. (NASDAQ: PENN), scheduled for June 17, 2025. The move follows PENN’s decision to reduce the number of board seats available for election, which HG Vora contends is an attempt to restrict shareholder rights. According to InvestingPro data, PENN’s stock has fallen over 21% in the past six months, with the company currently showing weak financial health scores and operating with significant debt burden.
HG Vora filed a motion on May 14, 2025, seeking expedited relief and a rapid trial in a Pennsylvania federal court, in response to PENN’s announcement that it would consider further board refreshment after the annual meeting. HG Vora argues this indicates an ongoing effort by PENN to entrench its board by planning to appoint a director post-meeting without shareholder input. The company’s financial metrics reveal challenges, with a debt-to-equity ratio of 3.7 and short-term obligations exceeding liquid assets, as shown by a current ratio of 0.74.
The investment firm has nominated Clifford along with Johnny Hartnett and Carlos Ruisanchez as independent director candidates, urging shareholders to vote for these nominees using the GOLD proxy card. The firm believes that PENN’s actions demonstrate a disregard for shareholder democracy and a history of actions that have undermined shareholder value. InvestingPro analysis indicates that while PENN is currently trading below its Fair Value, the company faces profitability challenges with negative earnings per share of -$0.56 over the last twelve months.
HG Vora, which along with its affiliates owns approximately 4.80% of PENN’s outstanding common stock, emphasizes the importance of shareholder-led change at PENN. The firm encourages shareholders to review its materials at www.WinAtPENN.com and vote accordingly.
This legal challenge is part of a broader proxy fight, with HG Vora advocating for its slate of director nominees against the backdrop of PENN’s corporate governance practices. The outcome of this dispute and the annual meeting could have implications for PENN’s future direction and governance.
The information in this article is based on a press release statement from HG Vora Capital Management, LLC.
In other recent news, PENN Entertainment Inc. reported its first-quarter 2025 financial results, revealing a miss on earnings expectations. The company posted revenues of $1.67 billion, falling short of the anticipated $1.71 billion. Earnings per share also missed the forecast, coming in at -$0.25 compared to the expected -$0.19. Despite these setbacks, PENN’s retail segment showed resilience, generating $1.4 billion in revenue, while the Interactive segment saw a year-over-year reduction in EBITDA losses. In a strategic move, PENN Entertainment nominated two candidates from HG Vora Capital Management to its Board of Directors, signaling ongoing engagement with shareholders and a focus on strategic growth.
On the analyst front, Benchmark maintained a Hold rating for PENN following the earnings miss, while Mizuho and Macquarie both adjusted their price targets to $24, maintaining Outperform ratings. These adjustments reflect the analysts’ perspectives on the company’s performance and future prospects. PENN’s Interactive segment is on track for profitability by the fourth quarter of 2025, with a significant improvement in customer acquisition and revenue growth since the launch of ESPN BET.
PENN has also emphasized its commitment to returning capital to shareholders, with plans to repurchase at least $350 million of common stock in 2025. Additionally, the company is progressing with development projects, including a new land-based Hollywood Casino in Iowa, set to replace an existing riverboat casino. These developments highlight PENN’s strategic initiatives and its focus on enhancing shareholder value.
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