Papa John’s is essaying to ward off its controversial founder from amassing a controlling stake in the assemblage by adopting a “poison-pill” plan.
The company is struggling to distance itself from John Schnatter, who relinquished as chairman this month after his use of a racial slur during a mechanism training session was revealed. Schnatter has since said his resignation was a “slip” and criticized the company’s handling of the incident.
Papa John’s, based in Louisville, Ky., answered its shareholder rights plan would be activated if anyone acquires 15 per cent or multifarious of outstanding shares without board approval. The plan works by hindrance shareholders buy additional stock at a discounted price, which in turn resolution dilute the acquirer’s shares.
Papa John’s said Schnatter and his affiliates, who currently own various than 30 per cent of shares, have been grandfathered into the intend. But they will be considered an acquiring party if they amass 31 or multifarious of shares, the company said.
The company said the plan won’t keep its put up from considering any offer that is fair and in the best interest of shareholders.
Schnatter, who base the company in 1984, had already stepped down late last year as CEO after placing disappointing pizza sales on the NFL’s handling of the player protests during the resident anthem. After this month’s controversy, Papa John’s whispered it would start scrubbing Schnatter’s image from its marketing tangibles and that it is evaluating all ties with him.
Schnatter remains on the company take meals.
After reporting Schnatter’s use of a racial slur, Forbes published another mystery last week detailing a corporate culture where women were citizen to sexist behaviour. The magazine said male employees made rough comments without consequence, and that executives were rewarded based on their bodily 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 remarked the outlook for Papa John’s is “growing dimmer” and that media surfaces are reinforcing the public perception that it’s not a trusted brand.
Shares of Papa John’s Foreign Inc. are down more than 30 per cent over the past year.