HG Vora, which is the largest investor inwards Penn Entertainment (NASDAQ: PENN), demanded the regional cassino reconstitute its board of directors patch claiming the current constellation violates Pennsylvania collective law.
In a recent varsity letter to the gaming troupe signed by Mandy Lam, full general counsel for HG Vora, the dodge monetary fund asserted there’s an “unequal allocation” of members crossways the various classes of William Penn directors and that violates the Keystone State Business Corporation Law of 1988 (BCL) as swell as the operator’s possess articles of incorporation.
The electric current structure of the Board is lawfully unlawful and disenfranchises shareholders by unnaturally narrowing the number of directors who may stand up for re-election at the Company’s 2024 yearly meeting,” according to the letter.
In a December 13D filing with the Securities and Exchange Commission (SEC), HG Vora revealed it reinforced an 18.5% post inward Penn via vernacular inventory and options. The money manager requested the gaming accompany subsidization it table seats.
HG Vora Shows Activist Hand with Penn
HG Vora, which has a lengthy history of investment inwards gaming companies, indicated it’s pushing for vary at William Penn with the exact for plank seats — a hall German mark of many activistic investors. That activism continued with the lay claim that Penn’s plank body structure is flawed.
The timing of the sidestep fund’s table activism toward the gambling casino operator is pertinent because the companionship commenced manager elections on Jan. 8 and the polling runs through and through Feb. 7. Penn’s 11 directors include CEO Jay Snowden and Gaming and Leisure Properties (NASDAQ: GLPI) CEO Saint Peter the Apostle Carlino. GLPI is the largest owner of tangible estate on which Penn casinos reside.
HG Vora hasn’t mentioned specific Penn directors it wants to put back if any. Of the 11-member board, 10 directors are white-hot and quadruplet are women.
“Our gameboard of directors is made upward of professionals from many disciplines — including investment funds banking, asset management, tax accounting system and consulting, advertising, gaming/entertainment and more — and their level off of expertise is unparalleled,” according to the gaming company’s website.
HG Vora Wants Fast Remedy
Corporate governance niceties aside, HG Vora elaborate how William Penn may follow in infringement of the BCL. In the letter of the alphabet to the board, the skirt monetary fund noted that Penn had sevener gameboard members in 2020 — ii apiece inward Class i and Class III roles and trinity inwards Class II. In November, the theatre director numeration increased to octet with the increase of another Class III member.
HG Vora added that simply deuce years before Penn’s 2021 yearly member, another Class managing director was added, bringing that aggroup to four.
“Since that time, PENN’s storage allocation of members crossways apiece division of the Board (two inwards Class I, threesome in Class II and IV inward Class III) fails to abide by with the requirements of the BCL and the Articles that the category sizes be ‘as nearly equalize inward list as possible,’” the money manager wrote. “We look the Company to curative this violation promptly, and we reticence all rights to have activeness to ensure PENN complies with the BCL and the Articles.”
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