The Donerail Group, a shareholder of Penn Entertainment, is calling for the company to sell assets amid strategic interest.
Significant shareholder Donerail sent a letter to the Penn board of directors and board chair David Handler. In the letter, Donerail urged the company to sell assets to generate “meaningful and certain” value creation for investors.
Donerail stated its belief that Penn’s casino assets alone are valued at over double the company’s current market capitalisation.
The hedge fund manager noted heavy criticism of Penn from the investment community over its capital allocation strategy. It highlighted that Penn’s shares are down more than 80% over the last three years.
Donerail said: “The growing pattern of guidance misses, alongside a demonstrated unyielding appetite to continue to invest in the company’s fledgling interactive projects, irrespective of past results and without a clear return framework, has significantly damaged the credibility of this management team..
