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    Papa John’s tries to prevent founder from gaining control

    By SHOOTUpdated:No Comments1421 Views
    This July 17, 2018, file photo, shows the corporate headquarters of Papa John's pizza located on their campus, in Louisville, Ky. Papa John’s is adopting a shareholder rights plan as it looks to safeguard against its disgraced founder possibly attempting to take control of the pizza chain. (AP Photo/Timothy D. Easley, File)
    LOUISVILLE, Ky (AP) --

    Papa John's is attempting to ward off its controversial founder from amassing a controlling stake in the company by adopting a "poison-pill" plan.

    The company is struggling to distance itself from John Schnatter, who resigned as chairman this month after his use of a racial slur during a media training session was revealed. Schnatter has since said his resignation was a "mistake" and criticized the company's handling of the incident.

    Papa John's, based in Louisville, Kentucky, said its shareholder rights plan would be activated if anyone acquires 15 percent or more of outstanding shares without board approval. The plan works by letting shareholders buy additional stock at a discounted price, which in turn would dilute the acquirer's shares.

    Papa John's said Schnatter and his affiliates, who currently own more than 30 percent of shares, have been grandfathered into the plan. But they will be considered an acquiring party if they amass 31 or more of shares, the company said.

    The company said the plan won't keep its board from considering any offer that is fair and in the best interest of shareholders.

    Schnatter, who founded the company in 1984, had already stepped down late last year as CEO after blaming disappointing pizza sales on the NFL's handling of the player protests during the national anthem. After this month's controversy, Papa John's said it would start scrubbing Schnatter's image from its marketing materials and that it is evaluating all ties with him.

    Schnatter remains on the company board.

    After reporting Schnatter's use of a racial slur, Forbes published another story last week detailing a corporate culture where women were subject to sexist behavior. The magazine said male employees made crude comments without consequence, and that executives were rewarded based on their personal ties to Schnatter.

    A representative for Schnatter said the story contains "numerous inaccuracies and misrepresentations."

    In a note to investors Monday, Stifel analyst Chris O'Cull said the outlook for Papa John's is "growing dimmer" and that media reports are reinforcing the public perception that it's not a trusted brand.

    Shares of Papa John's International Inc. are down more than 30 percent over the past year.

    Tags:John SchnatterPapa John's



    DirecTV calls off acquisition of rival Dish, possibly ending a yearslong pursuit

    Friday, November 22, 2024
    Dish Network satellite dishes are shown at an apartment complex in Palo Alto, Calif., Feb. 23, 2011. (AP Photo/Paul Sakuma, File)

    DirecTV is calling off its planned acquisition of rival Dish after the offer was rejected by bond holders at that company.

    The deal was reliant on Dish bond holders agreeing to trade in the debt they held for debt in the new company, a swap that would have cost them about $1.6 billion, collectively.

    The retreat by DirecTV this week may end a years-long effort by the company to acquire both Dish and Sling after it announced the bid in September.

    DirecTV was looking to acquire Dish TV and Sling TV from its owner EchoStar in a debt exchange transaction that included a payment of $1, plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approvals and bondholders writing off debt related to Dish.

    "While we believed a combination of DirecTV and Dish would have benefited all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV's balance sheet and our operational flexibility," DirecTV CEO Bill Morrow said in a statement.

    The prospect of a DirecTV-Dish combo has long been rumored, and reported talks resurfaced over the years. And the two almost merged more than two decades ago — but the Federal Communications Commission blocked the deal valued at the time at $18.5 billion deal, citing antitrust concerns.

    The pay-for-TV market has shifted significantly since. As more and more consumers tune into online streaming platforms, demand for more traditional satellite entertainment continues to shrink.

    DirecTV says that it will continue to invest in next-generation streaming platforms and offer new packaging options while integrating content from live TV alongside direct-to-consumer... Read More

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