By Abigail Summerville and Svea Herbst-Bayliss
-Apollo Global has withdrawn its offer to take pizza chain Papa John’s private at $64 a share, according to two people familiar with the deal, as Wall Street waits to see what is expected to be a tough earnings report on Thursday.
The private equity firm pulled its bid about a week ago as consumers tighten spending and the quick-service restaurant industry starts to stumble, these people said, asking not to be identified because the negotiations are private.
Apollo and Papa John’s did not immediately respond to requests for comment.
Apollo and Irth Capital Management submitted a joint offer for the company at just above $60 per share earlier this year before Apollo submitted a solo bid in early October, Reuters previously reported.
Papa John’s plans to release its third-quarter results on Thursday. Wall Street analysts have revised their earnings per share estimates down 1.77% over the last 30 days, according to data compiled by Zacks.
Zacks expects the pizza chain will post earnings of 40 cents per share, a 7% year-over-year drop, and revenue of $525.88 million, up 3.8% from the year-ago quarter.
In the second quarter ended June 29, the company’s sales rose 4% year-over-year to $529.2 million while its profits slid by close to 23% to $9.7 million.
Peter Saleh and Ben Parente at brokerage firm BTIG said they were skeptical of a turnaround plan announced by the company in early August and were “still dismayed by the basic operational gaps, high unit closure rates, never-ending international restructuring, and dismal earnings results,” according to a research note at the time.
Founded in 1984, Papa John’s is co-headquartered in Atlanta, Georgia, and Louisville, Kentucky. It has close to 6,000 restaurants in roughly 50 countries and territories.
(Reporting by Abigail Summerville in New York and Svea Herbst, Editing by Dawn Kopecki and Nia Williams)
Comments