Significant Change Required to Restore
Accountability and Proper Oversight to PENN's Board After Years of
Poor Judgment, Failed Transactions, and Value Destructive
Actions
PENN Directors Have Wasted Billions on Online
Sports Betting Investments Despite Zero Industry
Expertise or Credibility
Nominees Have Much Needed Expertise in Land
Based and Online Gaming, Strong Track Records of Disciplined
Capital Allocation, and History of Tremendous Value Creation
Through Strategic Transactions
NEW
YORK, Jan. 29, 2025 /PRNewswire/ -- HG Vora
Capital Management, LLC ("HG Vora"), a New York based investment firm with deep
expertise in the gaming sector and a large shareholder of PENN
Entertainment, Inc. (Nasdaq: PENN) ("PENN" or the "Company"), today
announced its nomination of three highly qualified director
candidates – William J. Clifford,
Johnny Hartnett, and Carlos Ruisanchez – to PENN's Board of Directors
(the "Board") at the 2025 Annual Meeting of Shareholders. All three
candidates are independent of both HG Vora and Company
management.
HG Vora believes there is significant unrealized value in PENN's
regional casino portfolio and collection of
Interactive assets. However, PENN's Board has numerous deficiencies
which have translated directly into abysmal returns for
shareholders. Over the past four years, PENN's shares have declined
-81%, dramatically underperforming the S&P 500 Index and its
closest peer, Boyd Gaming, which have returned +69% and +73%,
respectively, over the same period.
Parag Vora, Founder and Portfolio
Manager of HG Vora, said: "PENN's Board has overseen a misguided
Interactive strategy that has resulted in the reckless spending of
nearly $4 billion – greater than the
Company's entire market capitalization – on overpriced, poorly
negotiated M&A transactions and media partnerships that have
resulted in large ongoing operating losses due to an inability to
execute. The Company's Interactive strategy has been an abject
failure due to a pattern of overpaying, overpromising, and not
delivering.
"To date, there have been no repercussions for the Board's
persistent bad judgment and disappointing shareholder returns. We
believe this is in part due to PENN's weak corporate governance,
which disenfranchises shareholders and entrenches board members
while rewarding its CEO with excessive compensation.
"It should be clear to all stakeholders that change is urgently
needed to address these failings and help PENN achieve its full
potential. To that end, this is the first time in our firm's
15-year history that HG Vora has decided nominating directors is
necessary. We believe these three highly qualified, independent
director nominees bring the proven track records of enhancing
shareholder value and the skills and industry expertise to help
maximize value for all PENN shareholders."
Director Nominee Biographies:
- William J. Clifford – Mr.
Clifford has more than 30 years of experience delivering excellent
returns for shareholders in the gaming industry. He served as the
Senior Vice President, Chief Financial Officer and Treasurer of
Gaming and Leisure Properties ("GLPI"), a gaming-focused real
estate investment trust which spun out of Penn National Gaming,
from February 2013 through 2018.
Prior to this, Mr. Clifford served as Senior Vice President of
Finance and Chief Financial Officer of Penn National Gaming. During
his more than 12 years as Chief Financial Officer of Penn National
Gaming, Mr. Clifford was instrumental in the company's exponential
growth which drove an approximately 20x return for shareholders.
Prior to his employment with Penn National Gaming, he served in
various operational finance roles for a variety of
casino companies in Las
Vegas and the Bahamas. Mr.
Clifford has significant board experience and currently
serves as a member of the Board of Directors of Drive Shack
Inc. where he is a member of the Audit Committee and chairman of
the Nominating and Governance Committee. He previously served as a
member of the Board of Directors and chairman of the Audit
Committee of Intrawest Holdings, Inc. from 2014 to 2017.
- Johnny Hartnett – Mr.
Hartnett has decades of experience building and running online
sports betting and gaming businesses. Mr. Hartnett is
a non-executive director of Superbet Group, and prior to joining
the Board, he served as CEO of Superbet Group for five years.
During his tenure with the Blackstone backed business, revenue grew
7x and profitability 5x. Prior to that role, Mr. Hartnett served at
Flutter Group in a variety of positions over a 20-year tenure, most
recently as Chief Development Officer where he led the group's
M&A efforts, most notably on its acquisition of FanDuel.
Previous roles included Managing Director of Paddy Power Online, Managing Director
International, Chief Operating Officer of Sportsbet (Australia) and subsequently Chief Operating
Officer of Flutter (previously Paddy
Power). During his tenure at Flutter, shareholder returns
from the 2002 IPO to 2019 were approximately 23x.
- Carlos Ruisanchez – Mr.
Ruisanchez has a strong track record of capital allocation and
value creation for shareholders. He is the co-founder of Sorelle
Capital and Sorelle Hospitality, a business focused on investing in
the hospitality sector and real estate development. Prior
to Sorelle, he served as President and Chief Financial Officer
of Pinnacle Entertainment, Inc. for five years, also serving as a
member of its Board of Directors before its sale in 2018. During
his period as Chief Financial Officer, Mr. Ruisanchez helped drive
a nearly 5x total return for shareholders. He was instrumental
in transformative moves to unlock shareholder value, notably the
acquisition of Ameristar, execution of multiple highly accretive
share repurchase plans, the sale-leaseback with GLPI, and strategic
conversations with PENN which resulted in a merger with Pinnacle.
Mr. Ruisanchez has significant board experience and currently
serves as a member of the Board of Directors of Southwest Gas
Holdings, Inc. (NYSE: SWX, from 2022 to present). He
previously served as a member of the Board of Directors for Cedar
Fair Entertainment Company (NYSE: FUN, from 2019 to 2024) until its
merger with Six Flags Entertainment Corporation and Pinnacle
(NASDAQ: PNK, from 2016 to 2018).
Contacts
Investors
Bruce Goldfarb/Chuck
Garske
Okapi Partners
(877) 629-6355
Media
Jonathan
Gasthalter/Nathaniel
Garnick/Iain Hughes
Gasthalter & Co.
(212) 257-4170
Cautionary Statement Regarding Forward-Looking
Statements
The information herein contains "forward-looking statements"
that can be identified by the fact that they do not relate strictly
to historical or current facts. Specific forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts and include, without limitation, words
such as "may," "will," "expects," "believes," "anticipates,"
"plans," "intends," "estimates," "projects," "potential,"
"targets," "forecasts," "seeks," "could," "should" or the negative
of such terms or other variations on such terms or comparable
terminology. Similarly, statements that describe our objectives,
plans or goals are forward-looking. Forward-looking statements are
subject to various risks and uncertainties and assumptions. There
can be no assurance that any idea or assumption herein is, or will
be proven, correct. If one or more of the risks or uncertainties
materialize, or if HG Vora's underlying assumptions prove to
be incorrect, the actual results may vary materially from outcomes
indicated by these statements. Accordingly, forward-looking
statements should not be regarded as a representation by
HG Vora that the future plans, estimates or expectations
contemplated will ever be achieved. The information herein does not
constitute an offer to sell or solicitation of an offer to buy any
of the securities described herein in any state to any person.
Certain Information Concerning the Participants
HG Vora and the other Participants (as defined below) intend to
file a preliminary proxy statement and accompanying gold universal
proxy card with the Securities and Exchange Commission (the "SEC")
to be used to solicit proxies for the election of its slate of
director nominees at the 2025 annual meeting of shareholders (the
"2025 Annual Meeting") of PENN Entertainment, Inc.
("PENN").
The participants in the proxy solicitation are currently
anticipated to be HG Vora Special Opportunities Master Fund, Ltd.
("Master Fund"), Downriver Series LP – Segregated Portfolio C
("Downriver"), HG Vora Capital Management, LLC (the "Investment
Manager"), Parag Vora ("Mr. Vora"
and, collectively with Master Fund, Downriver and the Investment
Manager, "HG Vora"), William J.
Clifford, John Hartnett and
Carlos Ruisanchez (collectively all
of the foregoing, the "Participants").
As of the date hereof, (i) Master Fund directly owns 3,825,000
shares of common stock, par value $0.001 per share (the "Common Stock"), of PENN,
including 100 shares of Common Stock as the record holder and (ii)
Downriver directly owns 3,424,900 shares of Common Stock, including
100 shares of Common Stock as the record holder (collectively, the
7,250,000 shares of Common Stock owned by Master Fund and
Downriver, the "HG Vora Shares"). The HG Vora Shares collectively
represent approximately 4.8% of the outstanding shares of Common
Stock, based on the 152,629,402 shares of Common Stock outstanding
as of November 7, 2024, as disclosed
by PENN on its most recently filed quarterly report on Form 10-Q.
The Investment Manager is the investment manager of Master Fund
and Downriver, each of which have delegated all investment and
voting decisions to the Investment Manager. Mr. Vora is the manager
of the Investment Manager and has authority over day-to-day
operations and investment and voting decisions, including with
respect to the HG Vora Shares, of the Investment Manager. Each of
the Investment Manager and Mr. Vora may be deemed to have the
shared power to vote or direct the vote of (and the shared power to
dispose or direct the disposition of) the HG Vora Shares and
indirect ownership thereof. Mr. Ruisanchez directly owns 3,150
shares of Common Stock. Neither Mr. Clifford nor Mr. Hartnett
beneficially own any shares of Common Stock. Certain of the
Participants are also from time to time party to certain derivative
instruments that provide economic exposure to PENN's Common Stock.
All of the foregoing information is as of the date hereof unless
otherwise disclosed.
Important Information and Where to Find It
HG VORA STRONGLY ADVISES ALL SHAREHOLDERS OF THE CORPORATION TO
READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH
PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEBSITE
AT WWW.SEC.GOV. THE DEFINITIVE PROXY STATEMENT, WHEN FILED, AND
OTHER RELEVANT DOCUMENTS WILL ALSO BE AVAILABLE ON THE SEC WEBSITE,
FREE OF CHARGE, OR BY DIRECTING A REQUEST TO THE PARTICIPANTS'
PROXY SOLICITOR, OKAPI PARTNERS LLC, 1212 AVENUE OF THE AMERICAS,
17TH FLOOR, NEW YORK, NEW YORK
10036 (SHAREHOLDERS CAN CALL TOLL-FREE: (877) 629-6355).
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SOURCE HG Vora Capital Management, LLC
