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Papa John's International
Inc.
Board members plan to discuss and possibly vote Sunday morning on the adoption of a "poison pill" to prevent that its controversial founder takes control of the pizza chain, according to people familiar with the issue.
The board of directors has tried in recent weeks to break up
John Schnatter,
who founded Papa John 34 years ago, following revelations that he had used a racial insult during a recent conference call
. Schnatter owns 29% of Papa John's stock and has indicated that he will not give up control of the company without a fight.
Boards can adopt shareholder rights plans, commonly known as poison pills, to prevent an investor from accumulating a majority stake in a company – a defensive move aimed at thwarting a hostile takeover bid. They are usually used to prevent activist shareholders from gaining more control.
A spokesman for the company was not immediately available for comment on Saturday
. Schnatter used the word N in May during a conference call with his marketing agency that was to prepare him for his return as a spokesman for the company. He publicly apologized for his use of the word and agreed to resign from his position as chairman of the board earlier this month, but said he had since guessed his decision. He explained in a letter to the council last week that he was not a racist and that he was not using the word as a racial epithet.
Papa John's council voted last Sunday to terminate some of his ties to Mr. Schnatter, including allowing him to use an office at the company's headquarters in Louisville, Ky. Mr. Schnatter's lawyers challenge the termination of these agreements.
The company also suggested that Mr. Schnatter resign from the board, according to people's case.
Budget Group Reviews
Inc.
Last year, she adopted a poison pill to prevent her major shareholder, a hedge fund, from increasing her influence on the company. Other companies that have adopted poison pills in recent years
J.C. Penney
Co.
,
Tribune Publishing
Co.
and
Pier 1 Imports
Inc.
Write to Julie Jargon at [email protected]
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