Pizza chain Papa John's Int'l, Inc. PZZA reached a settlement with ousted founder and ex-CEO John Schnatter, which should put an end to an ongoing feud.
What Happened
Schnatter resigned from his post as CEO in December 2017 after comments he made about NFL anthem protests resulted in backlash against the company. The executive went on to resign as chairman in July 2018 after admitting to saying racial slurs on a conference call.
Schnatter held on to his 30-percent stake of the company and held a spot on the board as an independent director. A power struggle ensured when he explored ways of teaming up with private equity firms to re-take control of the pizza chain through a buyout.
On Tuesday, an agreement was reached that may put an end to the battle between Schnatter and the company for good.
The agreement also calls for Schnatter to dismiss two lawsuits against the company, including one without prejudice and one related to a sublease agreement with prejudice.
Why It's Important
Schnatter told CNBC in a statement he is "happy" to have entered into an agreement with the company. The statement also said it will better position the pizza chain to "regain its strength and market position" through the leadership of activist investor and shareholder Starboard Value.
The two sides will co-operate to appoint a mutually acceptable independent director who will replace Schnatter if an individual is selected before the 2019 annual shareholder meeting.
The stock traded higher by 2.2 percent to $44.38 per share Tuesday morning.
Related Links:
Papa John's Story Is Now 'Takeout Or Delivery'
Stifel Downgrades Papa John's To Sell Amid 'Fraternal Corporate Culture'
Photo credit: Mr. BlueMauMau, Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
