PENN Entertainment has launched a counterattack to challenge HG Vora Capital Management’s disapproval, standing up for its future plans and choices about how the company is run in a thorough message to its stockholders. This public statement follows just a day after HG Vora submitted its own proxy document to question PENN’s current path.
PENN Highlights Strategy for Long-Term Value, Pushes Back on HG Vora Proposals
In the letter, PENN stressed its dedication to increasing shareholder value by focusing on two areas: digital innovation and expanding its retail presence across the country. The company’s leaders pointed out that the industry is moving towards digital engagement, which means they need to keep investing in online platforms. They mentioned their partnership with ESPN and recent gains in their Interactive segment as crucial parts of their future profits.
The management talked about progress in several key areas. These include growing their customer base through the PENN Play loyalty program, attracting younger users, and increasing opportunities to sell products across their online and retail operations. The company also pointed out the strong performance of its 42 retail properties. They noted that these properties have above-average profit margins and generate strong cash flow, showing that their operations are stable.
The fight with HG Vora has focused on the activist investor’s ideas, which PENN called too aggressive and bad for long-term growth. PENN says HG Vora pushed for a risky stock buyback and wanted to scrap several planned projects — moves PENN thinks would hurt its financial health and promises to communities.
PENN Warns of Legal Concerns and Stands by Long-Term Plan
PENN claims it has tried many times to find a middle ground, even offering board seats to two of HG Vora’s picks, Johnny Hartnett and Carlos Ruisanchez. PENN mentioned it did not back HG Vora’s third choice, Bill Clifford, because of past reviews and concerns about his suitability and digital know-how.
To make matters worse, PENN said HG Vora tried to change governance rules in a way that broke state gaming laws. The company claimed HG Vora did not follow its regulatory deals, which led gaming authorities to take a closer look and tell them to back off until they met licensing rules.
Even with this fight, PENN stressed it still aims to focus on responsible capital allocation. This includes plans to cut debt and buy back $350 million in stock by the end of the year.
The bosses insisted their approach of reaching customers through many channels is showing real gains and will be crucial for future wins.As PENN gets ready for its June 2025 Annual Meeting, it asked shareholders to back its plan and board picks. The company emphasized its belief in creating lasting long-term value.