Papa John’s Jumped on Takeover Hopes. Why Private Ownership Could Be Good For the Pizza Chain.

Apollo submitted an offer within the past week to take Papa John’s private at $64 a share, Reuters reported Tuesday, citing people familiar with the situation. (Photograph by Joe Raedle/Getty Images)

Key Points

• Papa John’s shares rise on reports of a potential takeover by Apollo Global Management.
• Apollo Global Management offered $64 per share to take the pizza chain private, say reports.
• The proposed offer of $64 a share represents a premium of more than 50% from last Friday’s closing price of $41.59.

Shares of Papa John’s International spiked Wednesday on growing hopes for a takeover by private equity company Apollo Global Management. Investors are generally positive about the deal as private ownership could help the pizza chain move faster and more freely in its transformation plan.

Apollo submitted an offer within the past week to take Papa John’s private at $64 a share, Reuters reported Tuesday, citing people familiar with the situation. No deal is certain at this point, the report said. StreetInsider first reported the bid on Monday.

Following the news, Papa John’s stock rose 9.4% to $53.25 on Wednesday. Based on Wednesday’s close, stockholders could fetch a premium of 20% if the takeover comes to fruition.

Barron’s has reached out to Papa John’s and Apollo for comment.

Private-equity firms have been snapping up restaurant chains in recent years as they see attractive investment opportunities in the industry. Roark Capital bought Dave’s Hot Chicken for around $1 billion in June, after acquiring Subway in 2024 for approximately $9.6 billion.

Blackstone took a majority stake in Jersey Mike’s Subs this January in a deal that valued the chain at roughly $8 billion including debt. This follows its 2024 acquisition of Tropical Smoothie Cafe for about $2 billion.

As of Wednesday, Papa John’s has a market value of $1.74 billion. The rumored $64 bid would value the chain at $2.1 billion, implying a valuation that’s about 75% of industry leader Domino’s Pizza .

Papa John’s has nearly 6,000 restaurants around the world, more than half of which are in the U.S. That’s a third the size of Domino’s, which has a global footprint of over 21,000 stores, including approximately 7,100 restaurants in the U.S.

Like many fast-food chains, Papa John’s has been struggling with a weak consumer environment, where high prices have pushed people to eat out less. In the fourth quarter of 2024, North America comparable sales were down 4% from a year ago.

CEO Todd Penegor has been working hard to drive a transformation at the pizza chain and there are some early signs of success. In the second quarter of 2025, global systemwide sales were up 4% from a year ago, as comparable sales in North America increased 1%.

Still, the higher revenues were more than offset by rising expenses in marketing, loyalty programs, and higher food and labor costs, according to the company. Adjusted earnings per share was $0.41 in the second quarter, compared with $0.61 in the year-ago period.

Shares have gained 23% year to date, but are still 60% below their recent peak reached in 2021.

If Papa John’s were taken private, it could move faster on several fronts that public-market pressure often slows down, wrote Benchmark analyst Todd Brooks in a Wednesday note.

The pizza chain could experiment more freely with pricing and value promotions to show customers that it can deliver good value at lower price points. Many consumers today prefer a cheaper option that’s good enough rather than paying more for a premium brand, he wrote.

Recent data from Placer.ai suggests that Domino’s Pizza, which is running an aggressive low-price promotion, has been winning market share from national and regional competitors, including Papa John’s.

Domino’s recently posted better-than-expected quarterly results, with revenues up 6.2% from a year ago. The U.S. accounted for the bulk of the growth, thanks to the chain’s new stuffed-crust pizzas and its “Best Deal Ever” offer of one large pizza for $9.99, said the company.

While international same-store sales at Domino’s increased 1.7% from the prior year—a slowdown from the last three quarters—domestic same-store sales growth accelerated to 5.2%. That’s the fastest rate since the first quarter of 2024.

Being private would also give Papa John’s the flexibility to invest more heavily in technology. That means upgrading its digital platforms and loyalty program to better use customer data for targeted, personalized marketing—ultimately driving more repeat orders.

The restaurant chain could revamp its advertising strategy, including the restoration of local marketing campaigns that were made optional by the previous management. Penegor has admitted that the decision was “a big miss.”

Finally, private ownership could speed up the company’s efforts to improve restaurant-level profitability. Simplifying the menu—by focusing on core pizza products and reducing operational complexity—should help improve restaurant efficiency and improve profits, wrote Brooks.

The analyst has a Buy rating for the stock and a target price of $60.

Write to Evie Liu at evie.liu@barrons.com and Nate Wolf at nate.wolf@barrons.com