August 24, 2018 / 3:28 PM / 3 months ago

Papa John’s taps investment banks amid pressure from founder -sources

NEW YORK, Aug 24 (Reuters) - Papa John’s International Inc has hired Bank of America Corp and Lazard Ltd to help find ways to stabilize the restaurant chain, which has come under pressure from its founder, John Schnatter, people familiar with the matter said on Friday.

Schnatter resigned as chairman in July following reports that he had used a racial slur on a media training conference call.

The banks are at still at the early stage of working with Papa John’s to assess its options, and there is no wider exploration of strategic alternatives or sale process currently underway, the sources said.

The pizza chain has attracted some takeover interest from other companies and private equity firms following Schnatter’s departure, and the banks will assist the company if there is an acquisition offer to consider in the future, one of the sources added.

The sources asked not to be identified because the matter is confidential. Papa John’s declined to comment while Bank of America and Lazard did not immediately respond to requests for comment.

Schnatter could be not immediately be reached for comment.

Earlier this month, Papa John's posted a second-quarter comparable sales decline of 6.1 percent and cut its sales forecast, citing fallout from the company's split with Schnatter.

Negative publicity surrounding Schnatter depressed July traffic in North America, the company said at the time, noting that it was hard to predict how long and how badly that would affect sales. (Reporting by Harry Brumpton and Greg Roumeliotis in New York)

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