PENN Entertainment has concluded a prolonged dispute with activist investor HG Vora Capital Management by appointing three independent directors to its board and signing a cooperation agreement that sets terms for the coming years.

The arrangement brings Heather Ace, Jeffrey Fox and Fabio Schiavolin onto the board effective immediately. The agreement, disclosed in a Form 8-K filing with the Securities and Exchange Commission, follows months of tension that escalated into a proxy contest during 2025.

HG Vora holds roughly 4.7% to 4.8% of PENN’s outstanding shares, according to data compiled by LSEG and company disclosures. The investment firm had previously built a significantly larger position of about 18% before trimming its stake. It declined to comment on the settlement, according to Reuters.

Board Expansion and New Appointments

PENN confirmed that the board will expand from 11 to 14 members in connection with the appointments. David Handler, Chair of PENN’s Board, said, “On behalf of the Board, we are pleased to welcome Heather, Jeff and Fabio, highly accomplished individuals who each bring deeply relevant experience.”

Ace serves as Executive Vice President and Chief Human Resources Officer at Qualcomm Incorporated. Her previous roles include Chief Human Resources Officer at Dexcom and senior human resources leadership positions at Orexigen Therapeutics, Volcano Corporation and Life Technologies. She also practiced litigation and employment law at Gray Cary Ware & Freidenrich, now known as DLA Piper.

Fox is the founder and chief executive of Circumference Group. Earlier in his career, he led Endurance International Group Holdings as president and chief executive officer and previously headed Convergys Corporation. He began his professional career in investment banking at Merrill Lynch and Stephens Inc.

Schiavolin formerly led Snaitech S.p.A., a public gaming and entertainment company in Italy. During his tenure, Snaitech merged with Playtech plc, which operates gaming technology businesses in more than 17 countries. Before Snaitech, Schiavolin founded Cogetech, which later combined with Snai to form Snaitech. He began his career at Cirsa, a Spanish casino and gaming machine operator.

Under the cooperation agreement, Ace and Fox will serve as Class II directors with terms running through the 2028 Annual General Meeting, while Schiavolin, a Class III director, will stand for election at this year’s shareholder meeting.

Activist Campaign and Strategic Disputes

The settlement marks the end of a contentious period between the gaming operator and HG Vora. The investor had sought board representation in 2024, citing concerns about what it described as substantial underperformance and capital allocation decisions. In 2025, HG Vora formally launched a proxy fight to elect three director candidates, a move that later received backing from proxy advisory firm ISS.

HG Vora criticized PENN’s approach to digital expansion, including its investment in ESPN Bet under a 10-year agreement valued at about $2 billion. PENN dissolved that partnership in November 2025. The investor also pointed to earlier transactions such as the acquisition of Canadian sports and media brand theScore and the Barstool Sportsbook venture.

Analyst Dan Wasiolek commented on the company’s digital efforts, stating, “PENN made a poor digital investment when it acquired and later sold BarStool and the company has yet to see profitability improvement in the digital business,”

Shares of PENN have declined about 90% from their 2021 peak. In afternoon trading following the announcement, the stock fell 7.53% to $12.04.

Legal Action and Terms of the Agreement

The disagreement extended into court after PENN reduced its board size from nine to eight seats last year while electing two of HG Vora’s recommended nominees. HG Vora filed suit in a Pennsylvania District Court, alleging that the company failed to notify shareholders before eliminating a board seat.

PENN sought a stay pending an investigation by a special litigation committee. In November, the committee concluded that PENN “acted on an informed basis, in good faith and for the best interests of PENN in the exercise of its business judgment in its decision to reduce the overall size of the board from nine to eight.” The committee also determined that “it would not be in the best interests of the company to pursue the HG Vora claims or take other action.”

As part of the newly signed agreement, HG Vora has agreed to refrain from additional proxy fights, vote solicitation efforts, attempts to remove directors or calls for special meetings for a two-year period lasting until 45 days before the 2028 Annual General Meeting. The firm also committed not to increase its ownership above 5%, advocate mergers and acquisitions, short the stock or form activist groups during the restricted period. It will vote in favor of PENN’s director nominees and generally align with board recommendations on most matters.

The two sides will dismiss their ongoing legal proceedings and enter into non-disparagement commitments covering the same time frame. PENN also agreed to reimburse HG Vora for expenses related to its 2025 activist campaign.