Papa John's Shares Soar On Report Ousted Founder Held Merger Talks With Wendy's

Papa John's stock is sharply higher following a WSJ report that its founder and recently ousted chairman John Schnatter, held merger talk with Wendy’s. And while the talks between Wendy’s officials and the disgraced former Chairman and CO - who still sits on the board and owns 29% of Papa John’s - were preliminary and began before he stepped down as chairman last week, the talks, which Papa John’s board was aware of according to the WSJ, have cooled since the incident, one of the people said.

Schnatter resigned last week as chairman after it emerged that he had used a racial slur during media training to prepare him for a return as brand spokesman following his withdrawal from ads in the wake of a dust-up with the National Football League.

Schnatter blamed the chain’s sliding sales on declining TV football viewership amid the controversy over players’ national-anthem protests. He remains on the board which does not have the authority to remove him as a director and it will be up to shareholders whether to re-elect him at the next annual meeting in May.

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%.