Market Overview

Papa John's Plummets Following Report Trian Is No Longer Interested

Papa John's Plummets Following Report Trian Is No Longer Interested

Earlier this fall, it appeared as if the third-largest pizza chain in the United States had found its saving grace, when news arose Trian Fund Management LP was exploring a bid on Papa John’s Int’l, Inc. (NASDAQ: PZZA).

What Happened

Nelson Peltz's Trian, perhaps the most major of bidders, has removed itself from the running, according to The Wall Street Journal.

Papa John's increase in share price over the last three months could be one determining factor in discouraging potential buyers, WSJ reported.

Why It’s Important

Without a sale, the pizza company will likely face serious headwinds, as aggressive promotions and revised marketing has not sufficed the fourth consecutive quarter of declining sales. Because of founder’s John Schnatter continued involvement in the company and his recently tarnished reputation, the chain does not face an optimistic future.

Schnatter owns 31 percent of the company and remains on the board and somewhat heavily involved on the backend of business, WSJ reported.

What’s Next

Papa John’s has pursued this sale process since August. While some buyers remain interested in part of the company, no bidders have expressed intent for all of it. WSJ said binding offers are due next week.

Following the report, shares of Papa John's dropped 15.5 percent to $48.73 at time of publication Tuesday.

Related Links:

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

Stifel: Papa John's Story Is Now 'Takeout Or Delivery'

Photo credit: Mr. BlueMauMau, Flickr


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