Papa John's Moves Higher Amid Potential Takeover Reports

News of Papa John’s Int'l, Inc. PZZA’s founder, John Schnatter, has circulated for months.

The ousted executive continues the fight to regain his company, after racially insensitive comments he made earlier in the year led to his forced exit.

What Happened

Schnatter still owns roughly 30 percent of the company and has reached out to several private equity firms in an attempt to create partnerships intended to purchase the company, CNBC reported Wednesday.

Despite his intentions, CNBC reports most private equity firms have denied his request, considering the possible implications from the reputational dangers of a partnership. For any buyer who may express interest in the deal, Schnatter’s large stake in the company will likely cause controversy, the report said, as buyers should be leery of purchasing a company that's still heavily controlled by the ousted CEO.

Separately, Reuters reported Papa John’s "sent out information about an auction to sell itself to other companies and private equity firms this week, and expects to receive first-round bids by the end of October" in an attempt to fend of Schnatter.

Why It’s Important

Considering the recent mergers and acquisitions in the industry, the possibility of an upcoming sale could pique the interest of buyers like Inspire Brands, who just purchased Sonic, or Restaurant Brands International Inc. QSR.

After falling 30 percent this year, Papa John’s shares rose 10 percent following CNBC report. The stock traded around $49.43 at time of publication, up 6.9 percent.

Related Links:

Papa John's Founder Resigns Following Backlash Of His Racial Slur

Stifel Upgrades Embattled Papa John's On Lowered Expectations

Photo credit: Mr. BlueMauMau, Flickr