Papa John’s is hoping it can bring John Schnatter, AKA Papa John, into the recently announced deal with Starboard. The company just announced on Monday that they received a $200 million investment from a hedge fund. Papa John then proposed an alternative plan for the company he founded, but the company rejected it.
Schnatter resigned as chairman of Papa John’s in July of 2018 after he was caught using a racial slur during a conference call. The PR aftermath caused a massive decline of in-store sales during Q3. The controversy was expected to continue having negative affects on sales, so the company started looking into selling itself. Since then, Schnatter has retained a large portion of Papa John’s, and the result of Monday’s deal will leave him with 26% of the company.
The result of these events is the $200 million deal with Starboard, and Starboard CEO Jeffrey Smith has been appointed Chairman. Schnatter’s shares were also diluted as a result of the deal. He used to hold 31% of the pizza chain, but lost 5%.
