PENN Entertainment (PENN) shareholder HG Vora Capital Management said Monday that the company is undermining shareholder rights by limiting board elections ahead of the June 17 annual meeting.
The investment firm said PENN's May 19 letter, which stated it "will continue to consider opportunities to further refresh the Board" after the meeting, implies the company plans to re-add a previously removed board seat and appoint a director unilaterally.
HG Vora added that these moves are "self-serving actions" with "no legitimate corporate purpose," saying they are meant to prevent shareholders from voting on a third nominee.
The investor has nominated William Clifford as a third independent director and filed a motion in federal court on May 14 to ensure votes for him are counted, according to HG Vora's statement.
HG Vora said it avoided seeking a preliminary injunction to prevent the board from using it as a reason to delay the meeting and avoid its other two nominees, Johnny Hartnett and Carlos Ruisanchez.
Shares of PENN Entertainment were down about 3.8% in recent trading.
PENN Entertainment did not immediately respond to a request for comment from MT Newswires.
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