Papa rails at shutting piehole
Papa John’s founder John Schnatter demanded on Monday that the pizza chain remove a provision that bars him from talking to other investors about the company — a policy he says will lead to a “significant loss” for shareholders. Papa John’s board adopted a “poison pill” in July to thwart takeover attempts days after the founder, who holds 31 per- cent of the company’s shares, stepped down as chairman after a series of racially tinged controversies.
Included in the poison pill was a “wolf pack provision,” restricting Schnattner (left) from speaking to current and potential investors on the company.
In a fiery letter to Papa John’s board disclosed in a Monday filing, Schnatter claims that the “wolf pack provision” violates the law in Delaware, where the pizza chain is incorporated, and is an “infringement on shareholders’ rights.”
He said “several third parties” have tried to speak with him about Papa John’s, but the provision blocks those conversations.
It isn’t known if those third parties are interested in teaming up with Schnatter to buy the company, or want to pursue other plans.
Earlier this month. it was reported that billionaire Nelson Peltz’s Trian Fund requested information on Papa John’s as it explored a possible bid. Peltz reportedly met with Papa John’s in June, when Schnatter was still the company’s chairman, and brought along Wendy’s Chief Executive Todd Penegor.
Both Trian and Papa John’s declined to comment on the hedge fund’s reported interest at the time, with each noting that it doesn’t comment on “market rumors.”
Schnatter took a swipe on Monday at Chief Executive Steve Ritchie, who assumed the top role in January after Schnatter criticized the NFL’s handling of the national anthem protests.
“The leadership team that Steve Ritchie established is crumbling, and now he is promoting the wrong people and losing long-term employees,” Schnatter wrote.
Although Schnatter remains a board member, he was barred from the corporate office in July after it was revealed that he used the N-word during a marketing call in May.
Reps from Papa John’s defended the poison pill provision on Monday, saying that it was in the “best interests” of shareholders.
“The plan also reduces the likelihood that any person or group gains control of Papa John’s without paying an appropriate control premium to all of the stockholders,” the company added.