By Evie Liu

Papa John's stock surged 18.4% on Thursday following a report from Semafor that an investment fund is considering a takeover of the iconic American pizza chain.

According to the report, Irth Capital Management, backed by a member of Qatar's royal family, is in discussion with advisors about taking Papa John's private, citing people familiar with the matter. The pizza chain had a market value of about $1.6 billion as of Wednesday's close.

Papa John's did not immediately respond to a request for comment.

Matthew Bradshaw and Sheikh Mohamed "Moe" al Thani, the founder of Irth, have done similar private takeovers with fried-chicken stalwart Bojangles and mattress company Casper in the past, according to the Semafor report.

Papa John's has been struggling as consumers pull back from restaurant spending amid inflation pressures. In the latest reported quarter ended in September, total sales declined 3% from a year earlier and earnings per share dropped 19%.

Unlike rivals like Domino's and Pizza Hut, Papa John's has a relatively small international presence. The focus on the domestic market, which has seen particularly weak consumer sentiment, has strained the stock.

Before Thursday's gains, shares have tumbled about 40% over the past 12 months.

This isn't the first time Papa John's has been rumored as a takeout target. Nelson Peltz's Trian Partners also reportedly considered a takeover in 2018, while activist investor Starboard Value made a strategic investment in the firm in 2019.

The news of the potential acquisition was welcomed by investors as the stock surged on Thursday. While discussions are likely still at early stages, the market's positive response indicates investors are confident that Irth could help Papa John's turn around.

Regulatory filings show that Irth has around $200 million in assets under management. That means it will need to tap other sources to fund the acquisition. The fund disclosed a 4.99% position in Papa John's stock, worth about $70 million, in the fourth quarter of 2024.

Write to Evie Liu at evie.liu@barrons.com

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February 13, 2025 17:09 ET (22:09 GMT)

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