Activist hedge fund HG Vora is pressing ahead with its proxy fight against US casino operator Penn Entertainment, aiming to secure shareholder support to elect all three of its proposed board nominees despite Penn’s move to seat only two.

In a statement released today, HG Vora confirmed its intention to solicit votes for all three of its director candidates – Johnny Hartnett, Carlos Ruisanchez, and William Clifford – after Penn announced on Friday that it would appoint just two and reduce the board size to eight. The hedge fund called Penn’s decision to shrink the board a “self-serving action” intended to prevent shareholders from electing all three of its proposed directors.

HG Vora, which has previously criticised Penn’s strategic direction and capital allocation, argued that the board manoeuvre “lacks legitimate corporate purpose” and undermines shareholder rights. The fund also questioned Penn’s follow-through on its stated intention to appoint Hartnett and Ruisanchez, both of whom bring extensive gaming industry experience.

The dispute follows a tumultuous period for Penn, whose stock has plummeted 87% from its 2021 high. HG Vora has pointed to underwhelming acquisitions and capital missteps as key drivers of value destruction and has been pushing for board-level change to restore strategic discipline.

Originally, three directors were slated for re-election at the upcoming June meeting. However, one board member has since stepped down with immediate effect, and the other two will not seek re-election – moves Penn used to reduce the number of contested seats.

Penn operates 43 properties across 20 states, including the Hollywood Casino and Ameristar brands, and has been under increasing pressure as macroeconomic uncertainty and regulatory challenges cloud the outlook for gaming operators.