Papa John's Plunges on Report Pizza Chain Is No Longer Seeking a Buyer
(Bloomberg) -- Papa John’s International Inc. slumped the most in two months after a report it’s abandoning its attempts to find a buyer after the offers it received from private equity firms fell short. The beleaguered chain will now look for investors to purchase a stake, Reuters said, citing unidentified people familiar with the matter. Papa John’s declined to comment.
- Papa John’s has struggled to stabilize sales during an ongoing public dispute with its founder John Schnatter, who stepped down as chairman after reports emerged that he used a racial slur. It’s been trying to lure back customers amid fierce competition with Domino’s and other fast-food companies.
- The transaction, which could be structured as a private investment in public equity, would boost Papa John’s finances, Reuters reported. The capital could be useful to stem declines due to heavy promotional activity and relief being paid out to franchises to help offset a drop in sales.
- The report suggests that investors are treading carefully with Papa John’s as the company battles through legal disputes with its founder and deals with negative publicity. Schnatter is still its biggest shareholder.
- Shares fell as much as 8.8 percent, the biggest intraday drop since November. Shares touched their lowest point since August.
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