Trian Considers a Takeover Bid for Papa John’s

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The activist hedge fund lately contacted the pizza chain to gather data because it explores a doable bid, the individuals mentioned. Trian is considered one of a number of events to specific curiosity since Papa John’s put itself up on the market amid an acrimonious struggle with its founder, John Schnatter, who stays on the board and owns almost 30% of the corporate’s shares.

There is no such thing as a assure that Trian will make a suggestion or that Papa John’s will finally be offered. There are a number of different potential bidders, some individuals aware of the state of affairs added, together with firms and private-equity corporations.

Papa John’s is the world’s third-largest pizza supply chain after

Domino’s Pizza

DPZ -Zero.94%


Yum Manufacturers

Pizza Hut. The Louisville, Ky., firm that Mr. Schnatter based in 1984 has greater than 5,000 areas in 45 nations.

Trian, which owns a roughly 13% stake in


and holds three seats on the burger chain’s board, is understood for working with the administration of struggling firms. Nelson Peltz, Trian’s co-founder and Wendy’s chairman, invited Mr. Schnatter in late June to satisfy the burger firm’s leaders to debate a doable deal.

Mr. Schnatter introduced Papa John’s chief improvement officer, Tim O’Hern, with him to the June assembly slightly than Chief Govt Steve Ritchie, with whom he was combating, in response to individuals aware of the matter. Messrs. Schnatter and O’Hern flew by helicopter to satisfy Wendy’s Chief Govt Todd Penegor at a personal airport in Columbus, Ohio, the place Wendy’s relies. Mr. Schnatter, sporting a crimson shirt emblazoned with the Papa John’s brand, needed to know what number of seats he would have on the board of a mixed firm, in response to one individual aware of the assembly.

Mr. Schnatter stepped down as chairman in July after experiences leaked that he had used a racial slur on an organization advertising and marketing name.

Mr. Schnatter’s relations with the board and administration started to unravel final fall, when he drew criticism on social media for blaming Papa John’s poor gross sales on the Nationwide Soccer League’s dealing with of gamers’ protests throughout the nationwide anthem. He resigned as chief government in December.

Mr. Schnatter and the corporate have since been engaged in a public battle over who’s in charge for declining pizza gross sales. The corporate lately retained bankers to assist it conduct a strategic overview.

Ought to Trian proceed with a bid for Papa John’s, it isn’t clear whether or not Wendy’s would purchase the pizza chain or whether or not Trian would buy and function the chain individually.

Analysts have mentioned Papa John’s, which has a market worth of about $1.6 billion, could possibly be enticing to an organization that may deal with constructing a powerful model, as Wendy’s has accomplished. Wendy’s, the world’s third-largest hamburger chain, is understood for snarky social-media posts that take purpose at rivals and for emphasizing contemporary components.

Papa John’s is attempting to deal with the standard of its pizza and distance itself from Mr. Schnatter. For years the chain’s advertising and marketing was tied intently to Mr. Schnatter, whose picture was on its pizza containers. The latest controversies have led the corporate to take away him from advertisements.

Trian has a historical past with pizza. The agency in 2011 turned Domino’s largest shareholder and met with administration to make strategic ideas. It offered its stake the next 12 months after Domino’s up to date its menu and advertising and marketing supplies and made different enhancements, in response to Trian’s web site.

Trian doesn’t sometimes look to purchase firms outright, nevertheless it purchased Wendy’s in 2008 and mixed it with Arby’s, which it owned by way of holding firm Triarc Cos.

One other activist investor drawn lately to Papa John’s needs executives to enhance the enterprise earlier than contemplating a sale. Legion Companions Asset Administration LLC and the California State Academics’ Retirement System final week disclosed a 5.5% stake in Papa John’s.

Ted White, a Legion managing director, mentioned the chain ought to promote extra U.S. shops to franchisees and lower prices whereas setting apart variations with Mr. Schnatter.

Papa John’s board in July adopted a “poison capsule” provision to forestall Mr. Schnatter from regaining management of the corporate.

Write to Julie Jargon at, Cara Lombardo at and Dana Mattioli at

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