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"Dad" John Schnatter, founder and CEO of "Papa John's Pizza" participates in a radio show before a match between the Pittsburgh Steelers and the Cleveland Browns.
Papa John's International, the third largest pizza delivery company in the world, is seeking to divest a stake because of the acquisition offers she received from private equity firms that had not met her expectations in terms of valuation, announced Friday sources close to the case.
Such an agreement would be reached amidst a battle for control of Papa John's with the chain's founder, John Schnatter, who owns about 30% of the company. Schnatter resigned from his presidential post in July after learning that he had used a racist insult during a conference call for the media. He retains a seat on the board of directors of the company.
The transaction, which could be structured as a private investment in public funds, is expected to improve Papa John's finances, said the source, while the Louisville, Kentucky-based company is seeking to recover from the weak profitability of franchisees and increase sales through promotional discounts.
There is no certainty that Papa John's will accept any agreement, sources said, asking not to be identified because the case was confidential. Papa John's refused to comment.
Stocks fell nearly 8% to $ 39.00 during Friday morning trading.
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