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Papa Johns Abandons Search For Buyer, Looks for Investors Instead

The nation’s third-largest pizza company has given up its quest to find a new owner.

Papa Johns wasn’t satisfied with offers from private equity companies, reports Reuters. As a result, it has opted to look for an investor instead.

The news surprised investors, who quickly punished the company. Papa John’s stock fell more than 8% Friday in mid-morning trading.

Papa Johns has been struggling for awhile, at one time blaming the NFL’s National Anthem controversy for its problems.

Things worsened when founder John Schnatter reportedly used racial slurs on a media training conference call. He resigned as chairman, but is still a member of the company’s board, although he was kicked out of his office. And Schnatter, who owns about 30% of company stock, continues to fight with Papa Johns for control.

Papa Johns has tried to distance itself from its founder in the past year. The company dropped the apostrophe in its name during a random moment of rebranding. It had hoped to lock up a new owner by the end of last October, but interest in the chain wasn’t as strong as it had hoped.

Trian Fund Management, a hedge fund led by activist investor Nelson Peltz that owns 13% of Wendy’s, at one time considered a takeover of the pizza chain. The two apparently couldn’t come to terms, though.

Shares of Papa Johns are down 40% in the past year.