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The past year has been a difficult one for Papa John's, the controversial pizza chain after founder John Schnatter made racist comments during a conference call. Now, the company would be soliciting offers from other people ready to take over.
according to ReutersThis week, Papa John sent a message about an auction so that the company could eventually be sold to another company or a private equity firm. Papa John's is hoping to find a buyer by the end of October, or arrange for other funding, such as a partial investment.
The news boosted Papa John's action by 9% to $ 50.14 per share on Wednesday. Before today's earnings, Papa John's stock was down 37% last year, compared to 16% for the S & P 500 benchmark.
Schnatter stepped down as CEO of Papa John last December after criticizing the National Football League's leadership over protesting national anthems by players. In July, Schnatter stepped down as chairman of the board after reporting that he used the word n and spoke graphically about lynching during a May conference call.
Schnatter insisted that the comments were "misinterpreted", but Papa John's board took a harder line by drawing Schnatter's image from his logo, his TV commercials
In recent weeks, the bad blood between Papa John's board of directors and his largest shareholder – Schnatter still holds about 30% of the company's stock – has continued to simmer. The company dropped the apostrophe in its name during a random moment of brand change. Schnatter, meanwhile, sought to regain control of the company he founded, according to Reuters.
The negative press suffered by Schnatter and Papa John over the past year seems to weigh on the finances of the company. In August, Papa John's comparable store sales fell 6.1% year-over-year, prompting the company to reduce its revenue forecast for the coming quarters. The company invoked the fallout from the break with Schnatter.
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