TLDR
- Irth Capital Management has proposed acquiring Papa John’s in a deal valued at $47 per share
- The proposed transaction represents approximately $1.5 billion, marking a 50% premium over pre-announcement trading prices
- The Irth Capital proposal is supported by Brookfield Asset Management
- Shares of PZZA jumped approximately 19% on Wednesday, finishing at $38.86 following the Wall Street Journal’s report
- This marks the third acquisition speculation in the past six months; an earlier Irth/Apollo partnership collapsed in 2024
Shares of Papa John’s experienced a dramatic rally of nearly 19% on Wednesday following reports that a Qatar-backed private equity firm had presented a formal acquisition proposal for the struggling pizza chain.
Papa John’s International, Inc., PZZA
According to initial reporting from the Wall Street Journal, Irth Capital Management—supported financially by Brookfield Asset Management—has presented a $47 per share proposal for Papa John’s International. The proposed transaction would value the entire company at approximately $1.5 billion.
The proposed acquisition price represents a substantial 50% premium compared to PZZA’s trading levels before the buyout news became public. Prior to Wednesday’s trading session, Papa John’s maintained a market capitalization hovering around $1 billion.
PZZA trading experienced a temporary suspension during Wednesday’s session after circuit breakers were activated due to the sharp price movement following the news. The stock ultimately finished the trading day at $38.86.
Papa John’s has confirmed it is evaluating the acquisition proposal. However, the company has not committed to accepting the offer, and additional bidders could potentially enter the picture.
This represents Irth’s second attempt to acquire Papa John’s. The investment fund pursued a purchase of the pizza chain in 2024 in partnership with Apollo Global Management, though negotiations ultimately broke down without reaching an agreement.
Irth already holds a position in Papa John’s and has recently expanded its effective ownership to approximately 10%. The relatively new fund was established in 2024 and receives financial backing from Sheikh Mohamed bin Abdulla Al-Thani, a member of Qatar’s royal family who previously worked with the Qatar Investment Authority.
Matthew Bradshaw, who previously led Durational Capital Management, serves as co-founder. The investment team also features Mack Abbot, who formerly worked at Starboard Value—an activist investor that previously maintained a Papa John’s stake.
A Chain Under Pressure
An acquisition of Papa John’s would represent one of Irth’s most significant deals to date. For Papa John’s, the proposal arrives during a particularly challenging period.
The pizza chain announced last month plans to shutter hundreds of United States locations, streamline its menu offerings, and implement corporate workforce reductions as components of a comprehensive restructuring strategy. The company anticipates declining North American same-store sales throughout this year.
PZZA shares have plummeted approximately 55% over the previous five-year period. The stock reached its peak above $140 during 2021 and has experienced continuous downward pressure since that time.
Papa John’s has navigated years of operational difficulties, partially rooted in controversies involving founder John Schnatter. He departed from the CEO position in 2017 after making several controversial public comments, subsequently resigning from his board chairman role. The company experienced significant sales declines following these events.
Analyst View
Currently, eight Wall Street analysts provide coverage for PZZA, with the consensus rating being Moderate Buy. This consensus comprises three Buy ratings and five Hold ratings, all issued within the past three months.
The consensus price target stands at $42.57, which would have represented approximately 10% potential upside from Wednesday’s closing price—though still below the $47 per share proposal from Irth.
Papa John’s stock concluded Wednesday’s trading at $38.86, remaining notably below the $47 per share that Irth Capital has proposed.
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