Market Overview

Trian - A Major Wendy's Stakeholder - Now Eyes Papa John's

Trian - A Major Wendy's Stakeholder - Now Eyes Papa John's

An activist hedge fund may soon place the largest order in Papa John’s Int’l, Inc. (NASDAQ: PZZA) history.

What Happened

Trian Fund Management LP is exploring a buyout bid for the world’s third-largest pizza chain, according to The Wall Street Journal. The prospective buyer is reportedly one of many, including other companies and private-equity firms.

Why It’s Important

The beleaguered Papa John’s is working to move past a public dispute with founder John Schnatter, who owns nearly 30 percent of shares and occupies a board set.

Trian could help.

Before Domino’s Pizza, Inc. (NYSE: DPZ)’s turnaround, the hedge fund briefly got involved as the largest shareholder and a strategic adviser. Domino’s trades up 1,102 percent since Trian’s intervention.

Its record isn’t perfect, though.

Before Domino’s, Trian bought Wendys Co (NASDAQ: WEN) and merged it with Arby’s — an ultimately failed venture that quickly ended in an Arby’s sale.

Trian’s intention for Papa John’s, in the event of a sale, remains unclear. However, it may involve a fast-food marriage. Trian co-founder Nelson Peltz is the chairman of Wendy’s and orchestrated a meeting this summer to discuss the possibility of a merger. Trian owns a 13-percent stake in Wendy’s with three board seats.

What’s Next

Papa John’s expects a first round of bids by the end of October.

At time of publication, Papa John's shares were set to open up more than 6 percent at $53.80.

Related Links:

Papa John's Founder Resigns Following Backlash Of His Racial Slur

Stifel Upgrades Embattled Papa John's On Lowered Expectations


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