Papa John’ surges after report founder talking to private equity firms

John
Schnatter, founder and CEO of Papa John’s
Pizza.
Reuters

• Papa
  John’s founder and ex-CEO John Schnatter is reportedly in
  talks with private equity firms to repurchase the pizza chain
  he departed from earlier this year. 
• CNBC said some firms have turned him away, worried
  about reputational risks, following his admission of using the
  N-word on a company conference call in May. 
• 
  
  Shares surged 10% following the report.
  
• 
  
  Watch Papa John’s trade in real time here. 
  

Papa
John’s surged 10% Wednesday after
CNBC reported its former CEO, John Schnatter, has been
reaching out to private equity firms as he eyes buying back the
company he founded in 1984.

“Several private equity firms have turned him down though,
concerned about of the reputational risks inherent in partnering
with him”
CNBC’s Lauren Hirsch reports.

“Meantime, those interested in buying Papa John’s do not believe
that working with Schnatter is the best path towards a winning
offer, some of the sources say.”

Schnatter, who still owns nearly a third of the pizza
chain,
resigned from its board in July after admitting to using a

racial slur on a company conference call in May. He had

previously departed his post as CEO last December.

Since Schnatter left the company, Papa John’s enacted a “poison pill” provision designed to prevent him from taking
over the company by buying its stock on the open
market. It’s not clear how this caveat may work if a private
equity firm —
which have been snapping up fast-food shares left and right
lately — were to work with Schnatter to acquire a majority
stake.

Papa John’s shares were down 33% this year. 

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