Former Papa John’s CEO John Schnatter strongly denied a report Wednesday that he is contacting private equity firms about a potential joint bid to buy back the national pizza chain he founded.
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CNBC reported that Schnatter, who has two pending lawsuits against his former company, is “looking for capital” to acquire a controlling stake in Papa John’s. The report, which cites multiple sources familiar with the matter, said several firms have rebuffed Schnatter’s proposal due to concerns his reputation would negatively impact their business. Schnatter is Papa John's largest shareholder, owning roughly 30 percent of shares.
“John Schnatter has not reached out to or had any discussions with any private equity firm or any other entity about buying Papa John’s,” a spokesman for Schnatter told FOX Business. “Any such report about a potential transaction involving Mr. Schnatter is totally and completely false. It is unfortunate that CNBC published this false story without first contacting Mr. Schnatter to obtain the true facts.”
Papa John’s declined to comment. It’s unclear which private equity firms Schnatter purportedly contacted.
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Papa John’s shares rose more than 7 percent after the publication of CNBC’s report, which also named Wendy’s and Restaurant Brands International as companies that could buy Papa John’s.
Schnatter stepped down as Papa John’s chairman of the board last July after a report that he used a racial slur during a May conference call with marketing executives. He apologized for the remark, but said his comments were taken out of context and accused a marketing firm, Laundry Service, of extorting him.
The pizza executive later accused Papa John’s board of pressuring him to resign without conducting a full investigation into the situation. Papa John’s officials responded by enacting a “poison pill” measure to prevent Schnatter from acquiring a controlling stake.
Papa John’s also removed Schnatter from all of its marketing materials and evicted him from its Louisville, Kentucky, headquarters. The company recently launched its first major marketing campaign since Schnatter’s ouster.
While Schnatter’s representatives denied he is in contact with equity firms, he has publicly stated his intention to regain control of the company. He started a website, SavePapaJohns.com, to communicate directly with the public about the effort.
In court documents, Schnatter accused current CEO Steve Ritchie of launching a “false and defamatory campaign” to label him a racist after the May conference call became public knowledge. Schnatter is asking the court to reverse the “poison pill” measure and block a special committee’s investigation into Papa John’s corporate culture due to conflicts of interest.