Papa John's and Pizza Hut edge closer to finding new owners, sources say

Two of America’s most popular national pizza chains are edging closer to selling to new owners as stiff competition, rising commodity costs and waning consumer demand are undercutting ​performance, according to five people familiar with the discussions.

Papa John’s International and Pizza Hut, owned by Yum Brands are actively negotiating separate deals that could remove each company from ‌the spotlight of public earnings reports and stock exchanges, giving management teams time to rethink their strategies and business models, said the sources, who asked not to be identified because they aren’t authorized to speak publicly about the private talks.

Papa John’s stock price dropped 28% over the last six months to about $34.99 a share on Tuesday. The company was offered $47 a share in March from Qatari-backed investment fund Irth Capital, with backing from Brookfield Asset Management, according ​to two of the people, who were briefed on the plans.

Irth has been in talks with Papa John’s and conducting due diligence on a potential acquisition over the last ​month, the two people said. Some investors are quietly optimistic that Irth can reach a deal by the time Papa John’s releases quarterly earnings on ⁠May 7, they said. The talks are still ongoing and no deal is guaranteed, the sources cautioned.

Meanwhile, Pizza Hut owner Yum Brands set another deadline this week for bidders to submit formal ​offers, the three people familiar with those negotiations said.

So far, private equity firms Sycamore Partners, Apollo Global Management, and LongRange Capital, among others, have been vying for the chain, they said. Yum could choose ​someone to enter exclusive talks with after this week’s deadline, they added.

The three people said there’s no guarantee those firms will submit bids this week, and Yum could keep the chain or spin it off if the offers aren’t high enough.

Representatives from Yum Brands, Papa John’s, Irth, Apollo and Sycamore declined to comment. LongRange did not immediately respond to a request for comment.

Interest in acquiring the pizza chains comes as large corporate deals rebounded in the ​first quarter and as restaurants face growing uncertainties, ranging from more cost-conscious and calorie-counting consumers to steeper prices for ingredients as food inflation has risen in the last year.

In 2025, several small ​restaurant chains left the public market: Denny’s sold to an investor group for $620 million and Potbelly sold to private convenience store chain RaceTrac for $566 million. Canada’s MTY Food Group, which owns the Papa Murphy’s pizza chain, has ‌also been exploring ⁠a sale since last year, Reuters reported. California Pizza Kitchen was bought by a private investor group led by Consortium Brand Partners in December.

“Public [quick service restaurant] stocks are under pressure as softer consumer demand collides with persistent structural cost headwinds,” said Will Auchincloss, EY-Parthenon’s Americas retail sector leader. “Traffic has weakened as consumers pull back, and at the same time brands are navigating higher labor costs and a far more competitive value environment.”

DRAG ON EARNINGS

Weaker same-store sales, declining revenue, intense competition and a succession of chief executive officers since founder John Schnatter’s ouster in 2018 have weighed on Papa John’s share price, which ​peaked at around $130 a share in late 2021.

Pizza ​Hut sales are also falling. The unit has ⁠been a drag on Yum’s earnings as its other fast-food brands Taco Bell and KFC perform better. Any buyer would have to revamp many dated locations and going private would allow them to do that without the scrutiny of quarterly earnings reports, the people said.

Both pizza chains have said ​they need to shutter hundreds of locations to revive returns.

“For certain restaurant chains, being private offers flexibility to reset the business and invest through ​this cycle without the pressure ⁠of quarterly earnings,” Auchincloss said.

The fate of both pizza chains has been closely watched after Yum announced plans in November to conduct a strategic review of Pizza Hut, and Papa John’s batted away offers to sell at significantly higher prices last year.

Papa John’s CEO Todd Penegor, who took over in late 2024, said last month that he is focused on running the business, even after Irth Capital’s offer was reported. ⁠That followed a ​few bids from last year – a joint bid between Irth and Apollo, and then a solo bid from Apollo that was later withdrawn.

When ​asked about reports of potential bidders at a March 12 conference hosted by UBS, Penegor said he couldn’t comment on rumors or market speculation.

“I mean it’s been a constant, right? I’ve been in the role 18 months, and I think almost ​the full 18 months, we’ve always had some kind of rumor out there around the brand,” he said.