The dispute between PENN Entertainment and activist investor HG Vora over board of director seats at PENN has cooled off with the appointment of three new members and a lengthy cooperation agreement.
On Monday, PENN announced that it has named three new independent directors as part of the new accord with HG Vora. The agreement, which calls a truce on a contentious dispute between the gaming operator and the investor firm, was filed with the Securities and Exchange Commission (SEC) through a Form 8-K that will be enforced through 2027.
PENN’s new board members are Qualcomm Incorporated Executive Vice President Heather Ace, Circumference Group Chief Executive Officer Jeffrey Fox and former Snaitech S.p.A. CEO Fabio Schiavolin.
HG Vora must not bear arms
As part of the agreement, HG Vora has agreed to various terms which effectively limit the activism it can pursue for a period of two years, lasting until 45 days before PENN’s 2028 AGM. The terms include refraining from engaging in further proxy battles, soliciting votes, or trying to remove directors or call special meetings.
HG Vora currently owns around 4.8% of PENN after reducing its stake from roughly 18%. Another term stipulates that HG Vora cannot increase that holding above 5%.
As another condition of the agreement, PENN will pay HG Vora for all expenses that the investor incurred during its activist campaign in 2025.
HG Vora critical of PENN strategy
PENN and HG Vora have been embroiled in a lengthy battle after HG Vora made a request in 2024 to have a representative sit on PENN’s board to help drive long-term value for shareholders.
HG Vora wanted a seat amid its concerns about what it said was significant underperformance by the casino and sports betting operator. It took issue with PENN’s spending, most notably its investment in launching ESPN Bet. PENN’s 10-year deal with ESPN, which was valued at approximately $2 billion, was ultimately dissolved in November 2025.
The investor firm alleged that PENN’s board had severely reduced the value of the company through its focus on online casino and sports betting expansion, also citing other past M&A deals such as the one to buy Canadian sports and media brand theScore, as well as the failed Barstool Sportsbook venture.
Special litigation committee backed PENN
HG Vora requested that PENN elect three new board members amid its concerns. Last year, PENN elected two of the recommended new members and reduced the total number of board seats from nine to eight. As a result, HG Vora sued PENN in a Pennsylvania District Court, accusing the company of violating state law by not notifying shareholders before it removed one of the board seats.
In response, PENN filed a motion to stay while a special litigation committee (SLC) investigated the issue. Last November, the SLC ruled in favor of PENN, ruling that the company “acted on an informed basis, in good faith and for the best interests of PENN in the exercise of its business judgment in its decision to reduce the overall size of the board from nine to eight.”
The SLC’s probe into the matter included interviews, legal research and a review of documents with support from Philadelphia-based law firm Dilworth Paxson LLP. The SLC also determined that “it would not be in the best interests of the company to pursue the HG Vora claims or take other action.”
