Papa John's Surges on Report Ousted Chair Had Held Merger Talks With Wendy’s
(Bloomberg) -- Papa John’s International Inc. climbed after a report that the company’s controversial founder John Schnatter, under fire for the use of a racial slur, held recent talks with Wendy’s Co. about a potential merger.
The talks with Wendy’s were preliminary and began before Schnatter resigned as chairman of the company’s board, the Wall Street Journal reported. Discussions have cooled since the incident, it said.
Investors cheered the news on the hopes it signals that there could be interest from potential acquirers for the troubled company. Shares rose as much as 7 percent in New York. They’ve lost about a third of their value in the past year.
A spokesman for Schnatter declined to comment. A spokeswoman for Wendy’s declined to comment. A spokesman for Papa John’s declined to comment, noting that the company doesn’t comment on market rumors.
Schnatter, 56, has been facing backlash after a Forbes report last week said he used a racist term during a training session with media agency Laundry Service. While Schnatter has acknowledged using the slur, he said it was in the context of a training exercise and that he isn’t a racist.
It was the latest of a string of gaffes from the chain’s founder, who already left the chief executive officer role over critical comments about the National Football League’s national-anthem controversy. Schnatter remains on the company’s board and still owns nearly 30 percent of Papa John’s stock.
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