Penn Entertainment settled its lawsuit with activist investor HG Vora and agreed to appoint three new directors to its board as part of a deal that includes mutual non-disparagement terms.
The two sides signed a joint stipulation of dismissal with prejudice Monday morning, ending litigation filed last May after Penn opted to add only two board members instead of HG Vora’s desired three.
Heather Ace, Jeffrey Fox and Fabio Schiavolin were announced as new directors effective immediately, alongside a corresponding 8-K detailing the settlement terms.
PENN closed Monday at $12.17, down 6.5%. Year-end results will be reported Thursday.
New Penn director backgrounds
Chairman David Handler called the three new directors “highly accomplished individuals who each bring deeply relevant experience”. The staggered board now has 11 members.
Schiavolin is a familiar name to the gaming industry. He was most recently the CEO of Italian gaming operator Snaitech and previously held positions at Cogetech and Cirsa. He will serve as a Class III director with a term ending at the 2026 annual meeting, where Penn will support his reelection.
Ace is the executive VP and chief human resources officer at Qualcomm. She has held similar roles at multiple other companies and was a partner at the firm now known as DLA Piper where she specialized in mergers and acquisitions. Ace will serve as a Class II director with a term expiring at the 2028 annual meeting.
Fox is the founder and CEO of Circumference Group, and before that, served as CEO of Endurance International and Convergys. He will serve as a Class II director with his term expiring at the 2028 annual meeting.
Both sides to play nice
The “cooperation agreement” between Penn and HG Vora is in place until 45 days before the 2028 annual meeting.
“Pursuant to the Cooperation Agreement, HG Vora has agreed to abide by certain customary standstill restrictions, and the Company and HG Vora have also agreed to certain non-disparagement obligations, in each case which remain in effect until the forty-five days prior to the deadline for the submission of shareholder nominations of directors and business proposals for the Company’s 2028 Annual Meeting of Shareholders.”
Specifics of the deal:
- Penn will not decrease the number of Class II directors to fewer than four until after the 2028 meeting.
- HG Cora will not “participate in or encourage any ‘solicitation’” concerning electing or removing new directors or any transaction proposals.
HG Vora started a proxy battle last January over Penn’s failed sports betting products. Penn ended its partnership with Disney for the ESPN Bet brand in November.
