Papa John's spikes after report says the hedge fund that owns a chunk of Wendy's is looking into buying the pizza chain

  • Papa John's is surging early Tuesday following a report saying Trian Fund Management is interested in acquiring the pizza chain.
  • The activist hedge fund contacted the pizza chain "to collect information as it explores a possible bid," according to The Wall Street Journal.

Papa John's rallied early Tuesday following a report suggesting Trian Fund Management, the hedge fund that owns a stake of about 13% in Wendy's, is interested in buying the pizza chain.

According to The Wall Street Journal, the activist hedge fund contacted the pizza chain "to collect information as it explores a possible bid." Papa John's shares were up about 7% shortly after Tuesday's opening bell.

RELATED: Papa John's founder John Schnatter 

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Papa John's controversial founder John Schnatter
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Papa John's controversial founder John Schnatter
John Schnatter, founder and chief executive of Papa John's Pizza, arrives at the 2011 American Music Awards in Los Angeles November 20, 2011. REUTERS/Danny Moloshok (UNITED STATES - Tags: ENTERTAINMENT BUSINESS FOOD) (AMA-ARRIVALS)
John Schnatter (R), founder and chief executive of Papa John's Pizza, arrives at the 2011 American Music Awards in Los Angeles November 20, 2011. REUTERS/Danny Moloshok (UNITED STATES - Tags: ENTERTAINMENT BUSINESS FOOD) (AMA-ARRIVALS)
MIAMI, FL - JULY 11: A Papa John's restaurant is seen on July 11, 2018 in Miami, Florida. The founder of Papa John's pizza, John Schnatter, apologized Wednesday for using the N-word on a conference call in May. (Photo by Joe Raedle/Getty Images)
CLEVELAND, OH - OCTOBER 12, 2014: 'Papa' John Schnatter, founder and CEO of 'Papa John's Pizza' takes part in a radio show prior to a game between the Pittsburgh Steelers and Cleveland Browns on October 12, 2014 at FirstEnergy Stadium in Cleveland, Ohio. Cleveland won 31-10. (Photo by Nick Cammett/Diamond Images/Getty Images)
INDIANAPOLIS, IN - MAY 24: Papa John's founder and CEO John Schnatter attends the Indy 500 on May 23, 2015 in Indianapolis, Indiana. (Photo by Michael Hickey/Getty Images)
LOS ANGELES, CA - APRIL 04: John Schnatter and Halston Sage attend a basketball game between the Dallas Mavericks and the Los Angeles Lakers at Staples Center on April 4, 2014 in Los Angeles, California. (Photo by Noel Vasquez/GC Images)
CLEVELAND, OH - OCTOBER 12, 2014: 'Papa' John Schnatter, founder and CEO of 'Papa John's Pizza' takes part in a radio show prior to a game between the Pittsburgh Steelers and Cleveland Browns on October 12, 2014 at FirstEnergy Stadium in Cleveland, Ohio. Cleveland won 31-10. (Photo by Nick Cammett/Diamond Images/Getty Images)
LAS VEGAS, NV - APRIL 07: John Schnatter, Founder and Chairman of the Board for Papa John's Pizza, gives a thumbs up before a charity exhibition race against Antron Brown (not pictured) during the the 19th Annual DENSO Spark Plugs NHRA Four-Wide Nationals Saturday, April 7, 2018, in Las Vegas, Nevada. (Photo by: Marc Sanchez/Icon Sportswire via Getty Images)
NEW YORK, NY - JANUARY 31: John H. Schnatter, Founder, Chairman & CEO of Papa John's International, Inc. rings the NASDAQ Opening Bell at NASDAQ MarketSite on January 31, 2014 in New York City. (Photo by Rob Kim/Getty Images)
NEW YORK, NY - FEBRUARY 01: Dallas Cowboys owner Jerry Jones (L) and Papa John's Pizza founder John Schnatter attend the DirecTV Super Saturday Night at Pier 40 on February 1, 2014 in New York City. (Photo by Charles Norfleet/FilmMagic)
Spider Man and Papa John Founder John Schnatter at the Spider-Man and Papa John's Honor 'Hometown Super-Heroes' October 29, 2007 in Times Square in New York City. (Photo by Mark Von Holden/WireImage)
LOS ANGELES, CA - NOVEMBER 20: Founder of Papa John's Pizza John Schnatter attends the Official After Party for the 2011 American Music Awards held at the Conga Room at L.A. LIVE on November 20, 2011 in Los Angeles, California. (Photo by John Shearer/AMA2011/Getty Images for AMA)
LOS ANGELES, CA - NOVEMBER 20: 'Papa John's' Pizza Founder John Schnatter arrives at the 2011 American Music Awards held at Nokia Theatre L.A. LIVE on November 20, 2011 in Los Angeles, California. (Photo by Frazer Harrison/AMA2011/Getty Images for AMA)
NEW YORK - OCTOBER 29: Founder of Papa John's John Schnatter speaks onstage at the Spider-Man and Papa John's Pizza's announcement of 'Hometown Super-Heroes' in Times Square October 29, 2007 in New York City. (Photo by Bryan Bedder/Getty Images)
LOUISVILLE, KY - MAY 06: Paps John's CEO John Schnatter attends the 132nd Kentucky Derby at Churchill Downs on May 6, 2006 in Louisville, Kentucky. (Photo by Paul Hawthorne/Getty Images)
John Schnatter, founder & Pres. of a chain of Papa John's pizza restaurants, w. employees at one of his 1,049 outlets, making a surprise quality check on a row of pizzas layed out on counter at restaurant. (Photo by Taro Yamasaki/The LIFE Images Collection/Getty Images)
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In late June, Nelson Peltz, Trian's co-founder and Wendy's chairman met Papa John's founder and former CEO John Schnatter to discuss a possible deal. However, the report said there were several other bidders, including private-equity firms.

In September, there were reports about Schnatter reaching out to private-equity firms in an attempt to buy back the company he founded in 1984. It is the world's third-largest pizza delivery chain, with more than 5,000 locations in 45 countries.

Schnatter, who still owns nearly a third of the company, resigned from its board in July after admitting to making controversial comments on a company conference call in May. Since then 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. The plan takes effect "if a person or group (including a group of persons who are acting in concert with each other) acquires beneficial ownership of 15% or more" of the company's common stock, according to the company's press release.

Papa John's was down 6% this year through Monday.

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