Papa John's spikes after a report says Papa John is in talks to try and buy back the pizza chain

Papa John's surged 10% Wednesday after CNBC reported its former CEO, John Schnatter, has been reaching out to private equity firms as he eyes buying back the company he founded in 1984.

"Several private equity firms have turned him down though, concerned about of the reputational risks inherent in partnering with him" CNBC's Lauren Hirsch reports.

"Meantime, those interested in buying Papa John's do not believe that working with Schnatter is the best path towards a winning offer, some of the sources say."

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Schnatter, who still owns nearly a third of the pizza chain, resigned from its board in July after admitting to using a racial slur on a company conference call in May. He had previously departed his post as CEO last December.

Since Schnatter left the company, Papa John's enacted a "poison pill" provision designed to prevent him from taking over the company by buying its stock on the open market. It's not clear how this caveat may work if a private equity firm — which have been snapping up fast-food shares left and right lately — were to work with Schnatter to acquire a majority stake.

Papa John's shares were down 33% this year.

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SEE ALSO: Embattled Papa John's exec John Schnatter resigns as chairman of the board at the pizza chain after admitting to using racial slur on a conference call