"Papa John" Schnatter denies contacting stock companies to obtain a buyout offer

John Papa John's former CEO, John Schnatter, strongly denied on Wednesday a report that he would contact private equity firms about a potential joint takeover bid for the national pizza chain he founded.

CNBC reported that Schnatter, which has two pending lawsuits against its former company, is "seeking capital" to acquire a majority stake in Papa John's. The report, which quotes multiple sources close to the case, said several companies had rejected Schnatter's proposal because of concerns about its reputation. Schnatter is Papa John's largest shareholder, holding approximately 30% of the shares.

"John Schnatter did not contact any private equity firm or other entity to buy Papa John's," a Schnatter spokesman told FOX Business. "Such a report on a potential transaction involving Mr Schnatter is totally and completely false. It is unfortunate that CNBC published this false story without first contacting Mr. Schnatter to get the facts.

Papa John refused to comment. It is unclear which private equity firms Schnatter would have contacted.

Papa John's shares rose by more than 7% following the release of CNBC's report, which also named Wendy's and Restaurant Brands International as companies that could buy Papa John's.

Schnatter stepped down as chairman of Papa John's board last July after reporting he used a racial insult during a May conference call with marketing executives. He apologized for this remark, but said his comments had been taken out of context and accused a marketing company, Laundry Service, of extorting him.

The pizza executive later accused Papa John's advice of pressuring him to resign without conducting a thorough investigation into the situation. Papa John's officials reacted by adopting a "poison pill" measure to prevent Schnatter from acquiring a majority stake.

Papa John's also removed Schnatter from all his marketing materials and kicked him out of his Louisville, Kentucky office. The company recently launched its first major marketing campaign since the fall of Schnatter.

Although Schnatter's representatives have denied contact with stock companies, he has publicly stated his intention to take back control of the company. He created a website, SavePapaJohns.com, to communicate directly with the public about this effort.

In court documents, Schnatter accused current CEO Steve Ritchie of launching a "misleading and defamatory campaign" to label him a racist after the May conference call went public. Schnatter is asking the court to overturn the "poison pill" measure and block the investigation of a special committee on Papa John's corporate culture due to conflicts of interest.