Jeffrey Smith As Chairman Of Papa John Adds $200 Million Investment
On Monday, Papa John has announced that Starboard Value LP will be investing in the pizza chain with $200 million and will include two of its investors into its board.
Jeffrey C. Smith, the CEO of Starboard will now become chairman of Papa John too. Anthony M. Sanfilippo, the CEO of Pinnacle Entertainment will also join the board.
Papa John’s shares rose up by 6 percent after the announcement was made during premarket trading on Monday.
The previous CEO John Schnatter had to resign for making racist comments. He had to step down in Dec 2017 from being the CEO. Later he had used the N-word while on a conference call and had to step down as chairman in 2018. However, Schnatter is still one among the board of directors. He holds 31 percent stake in his company.
Shares of Papa John fell almost 37 percent last year after Schnatter had to step down.
The new CEO will work in the best interest of the company and will help to improve its growth and financial performance, says Olivia Kirtley, a special committee member from Papa John.
The new partners will help the company with their expertise in the restaurant, hospitality and retail industries, say officials from Papa John.
Current CEO Steve Ritchie will join the board, making it a group of nine directors of which seven are independent.
Starboard will be investing through convertible stock purchases between 11 to 15 percent. The company has the option to further add $50 million as an investment by March 2019.
The move was made after the Papa John’s board members formed a special committee along with advisors Bank of America Merrill Lynch and Lazard and evaluated strategic options to maximize the value of the company and to act in the best interests of its shareholders.