John Schnatter may be out as chairman of Papa John's but he is still having a direct impact on the share price.
Reports are out that, before his resignation, he had merger talks with Wendy's. This was something the board was aware of although talks have subsided since Schnatter left the company.
courier-journal.com
Papa John's has seen a decline in sales. This was what prompted Schnatter to lash out. He was caught in a training video of using a racial slur to describe the National Anthem controversy in the NFL.
Schnatter believes this was a large part of the decline in sales.
The training video was being shot in preparation for Schnatter to return as the spokesman for the organization.
Schnatter blamed the chain’s sliding sales on declining TV football viewership amid the controversy over players’ national-anthem protests.
While it is unclear if a deal will happen following the preliminary talks, and the recent scandal involving the pizza chain, PZZA shares rose as much as 7% on the news; WEN rose as much as 4.7%.
Schnetter sits on the board of Papa John's and cannot be removed. His seat is secure until the next election at the end of May. He presently holds 29% of the company stock meaning he only needs another 21.1% of the shareholder vote to retain his position.
It is unclear whether the talks cooled because of the actions of Schnatter or Wendy's determined it was not a good business fit. Either way, it appears the merger talks are on the back burner for the moment.
For more information about this story, click here.