PENN Entertainment has once again fired back at activist investor HG Vora after the group launched a website dedicated solely to promoting its stance that PENN is mismanaged and needs new board leadership.
“Last week, HG Vora issued a 116-page investor presentation full of false claims and mischaracterizations about the company,” PENN wrote in a letter to shareholders this week.
In particular, the operator of ESPN Bet and Hollywood Casino refuted HG Vora’s claims about the extent of CEO Jay Snowden’s compensation and the alleged use of private jets as a “personal Uber service.”
“We understand that claims of management enriching themselves with excessive compensation, personal use of corporate aircraft, or timely insider selling are attention-grabbing headlines; however, HG Vora’s claims are simply not based on the facts readily available in our public disclosure,” the letter added.
In an extensive presentation posted on WinatPenn.com, HR Vora wrote that Snowden is significantly overpaid despite what the investor firm said was demonstrably subpar performance. The website also alleged that Snowden and other PENN leaders were allowed “excessive” use of private jets, which “signal a culture of entitlement and detachment from shareholders at a time when the company’s interactive segment is losing money and returns are down.”
Those claims are just part of a more than 100-page deck, letters and third-party financial evaluations of PENN uploaded to the website.
PENN accused HG Vora of disregarding regulations
In its latest response, PENN chastized HG Vora and suggested that the investor is looking to create outlandish negative headlines by misrepresenting the reality of the company’s leadership and strategy.
PENN also accused HG Vora of disregarding gaming regulations “in its pursuit to exercise control and influence over PENN without all necessary licenses.”
“PENN’s gaming licenses are our most valuable assets — we understand and take our regulatory obligations seriously and, over our 30-year history in the industry, PENN has earned a reputation of trust with our regulators and the communities in which we operate,” added the note.
“Rather than operate within the well-established gaming regulatory framework, HG Vora has chosen to test boundaries and blame-shift, even concluding that we ‘[r]epeatedly sought to weaponize the company’s regulators.'”
PENN points to board appointees
The latest exchange is the most recent chapter of an ugly back-and-forth between the company and its investor, which began with HG Vora publicly denouncing PENN’s focus on digital sports betting, which it alleged has come at the expense of retail growth and shareholders’ best interests.
PENN has defended its approach by asserting that its interactive segment is close to profitability and positioned to drive long-term value for shareholders including HG Vora.
HG Vora also argued that PENN did not fulfill its obligations by only putting up two seats on its board for nomination instead of the three candidates the firm recommended. That sparked an acrimonious proxy battle between the two organizations. HG Vora has gone as far as to sue PENN in the Eastern Pennsylvania District Court, claiming PENN is evading regulatory oversight and violating law by removing one of the three seats without notifying shareholders.
“Despite HG Vora’s uninformed suggestions, gaming regulators exercise their authority to applicable statutes and regulations – not based on PENN’s suggestions,” PENN retorted this week.
PENN also noted that HG Vora has been successful in achieving changes to PENN’s board as two of the nominees the hedge fund backed, Johnny Hartnett and Carlos Ruisanchez, are expected to be elected at the company’s annual meeting on June 17.
