Papa John’s International, Inc. (NASDAQ:PZZA) shares spiked this morning on NASDAQ, after a Papa John’s potential takeover was reported by the Wall Street Journal last night.
Papa John’s Potential Takeover
According to the reporter at the Wall Street Journal, people familiar with the matter said that Trian Fund Management LP is evaluating a takeover bid for the pizza company. The activist hedge fund recently contacted Papa John’s to collect information and is one of several parties currently interested in the company since it put itself up for sale.
Trian became the largest shareholder of Domino’s back in 2011 and met with management of the company to go over suggestions it had. The company then sold its stake in the company a year later after the pizza company updated its menu and marketing materials.
The fund manager doesn’t usually buy companies outright but did do so with Wendy’s back in 2008. After it bought Wendy’s, it combined the company with Arbys.
Is a Takeover a Good Move?
Papa John’s ran into some trouble with its founder and former chairman, John Schnatter, back in early July. Schnatter made a racial slur and graphic description of violence against minorities in a conversation with the company’s former media agency. After this, the board of Papa John’s International adopted a ‘poison pill.’
This was just months after Schnatter stepped down from his CEO position after taking a strong stance on the NFL’s national anthem controversy. Papa John’s had been a long-standing sponsor of the National Football League. Due to the CEO’s comments, The New York Yankees cut ties with the company.
Although Schnatter resigned from his CEO and Chairman position, he still owned 30% shares of the company. The poison pill was put in place so that Schnatter couldn’t gain majority control.
If Trian buys Papa John’s, this could be very beneficial for the pizza company.
PZZA Stock Movement
According to Yahoo Finance, PZZA stock shares are trading at $54.58 a share, up $4.16 (+8.23%).
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