Papa John’s International, Inc. (NASDAQ: PZZA) is having an incredibly strong start to the trading session this morning, and for good reason. The company is the center of takeover chatter, and investors love to see takeovers. With the chatter hitting the wire, investors are excited, sending the stock on a run for the top. Today, we’ll talk about:
- The potential takeover;
- what we’re seeing from PZZA stock as a result; and
- what we’ll be watching for ahead.
PZZA Heads Up On Takeover Chatter
As mentioned above, Papa John’s is having a great start to the trading session this morning as chatter is hitting the wire about a popular takeover. According to a report first published on the Wall Street Journal, Train Fund Management LP is evaluating a takeover bid for PZZA.
Recently, there have been several parties that have expressed an interest in taking Papa John’s over since the company put itself up for sale after a fight with its founder, John Schnatter. However Schnatter remains on the board and owns nearly 30% of the company’s shares.
Nonetheless, the report suggests that the activist hedge fund has contacted PZZA in an attempt to collect information and is in the process of exploring a potential bid.
While the story did break through a highly trusted outlet, it’s important to remember that there has been no confirmation on either side of the coin. Considering this, while an acquisition may happen, it’s important to treat this as what it is, a rumor until proven otherwise.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Papa John’s the news is pretty positive. After all, while the chatter should be treated as a rumor, if a takeover does happen, it’s likely to happen at a strong premium, immediately returning value to shareholders. So, it comes as no surprise that excited investors are sending the stock on a run for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:13), PZZA is trading at $54.65 per share after a gain of $4.23 per share or 8.39% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PZZA. In particular, we’re interested in following the story surrounding the potential takeover of the company, not only by Train Fund Management, but the potential of a takeover by other interested parties as well. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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