The beleaguered pizza chain contacted potential buyers asking for offers.
This week, Reuters reported that Papa John’s reached out to a number of companies and private equity firms asking them to submit offers to acquire the pizza chain.
According to anonymous sources familiar with the matter, Papa John’s sent potential buyers information about an auction to sell the company, and expects to receive initial bids by the end of October. One source added that the franchise is also seeking alternative deals, such as a new investment. Papa John’s has declined to comment.
The move is likely an extreme preventative measure to fend off a hostile takeover from ousted founder John Schnatter, who still owns about 30 percent of the company. Schnatter, who has said he regrets resigning following reports that he used a racial slur on a conference call this summer, has been publicly trying to regain control of the company he founded.
On Wednesday, CNBC reported that Schantter had reached out to private equity firms in hopes of striking a partnership to purchase Papa John’s and take the company private. Schnatter denied that report.
In July, Papa John’s board of directors approved a poison-pill provision to prevent Schnatter from purchasing a majority share in the company. The measure would dilute the franchise’s common stock significantly as soon as Schnatter’s stake reached 31 percent.
Reports of a potential buy-out sent Papa John’s shares up 8.5 percent on Wednesday, giving the franchise a closing market value of nearly $1.6 billion.