A sale of Papa John’s is looking more likely by the day.
According to Reuters, a handful of private equity firms are vying to buy the chain, which has been in crisis mode for months following the departure of founder and former chairman John Schnatter over racial slurs.
The private equity firms include Roark Capital, which has already helped fuel the acquisitions of Buffalo Wild Wings and now Sonic by Arby’s owner Inspire Brands, as well Bain Capital, CVC Capital Partners and the KKR & Co.
Trian Fund Management, previously said to be considering a bid, is considering an investment in the company if a sale agreement isn’t reached, according to Reuters.
The report sent Papa John’s shares skyrocketing late on Tuesday. Shares rose nearly 10% on Tuesday.
Papa John’s spokesman Peter Collins said that the company doesn’t comment on “market rumors.”
Papa John’s stock is still down on the near and down 22% since last Halloween. That was the day before Schnatter, at the time the chain’s chairman and CEO, appeared to blame NFL player protests for his chain’s weakening same-store sales. Same-store sales turned sharply south afterwards.
But the company’s stock has recovered much of what it lost since July, when Schnatter acknowledged making a racial slur during a conference call with a marketing firm intended to help him avoid such public relations problems.
Papa John’s appointed a special committee of board members to weigh the company’s actions in response to the crisis—that committee ended Schnatter’s founder’s agreement with the company and kicked him out of his office at the Papa John’s headquarters in Louisville, Ky.
But reports in the months since then have suggested the company is currently for sale, which has helped the stock price recover.
Roark recently completed $6.5 billion in fundraising, which could help fuel more deals in the restaurant space.
Bain Capital is no stranger to the restaurant space, and in April made an investment in Sustainable Restaurant Group, the operator of Bamboo Sushi and QuickFish, through its Double Impact fund. But it has made big investments in the space before, including Dunkin’ Brands and Burger King.
KKR is a huge firm that has made numerous deals across a number of industries and has a minority stake in Lemonade Restaurant Group, for instance. CVC has made some deals in the restaurant space, too, notably with investments in restaurant chains in China.
The Reuters story said that it’s not certain whether Papa John’s will be sold. There is also the question of Schnatter himself. The company’s founder still owns 30% of Papa John’s shares and has sued the company and called on the board to remove a provision preventing shareholders from amassing too much stock in the company.