Papa John's spikes after a report says private equity firms are fighting for a stake in the pizza chain

• Private equity firms are fighting to acquire a stake in the pizza chain Papa John’s, according to Reuters.
• Shares of the pizza chain rallied 10% following the news.
• Papa John’s is likely to be valued at $63.50 per share during a potential acquisition, Jefferies analyst Alexander Slagle recently said.
• Watch Papa John's trade live.

Papa John's shares rallied 10% Tuesday after a Reuters report said private equity firms are fighting to acquire a stake in the pizza chain.

Reuters reports, Bain Capital and CVC Capital Partners are among the private equity firms competing to buy a stake.*

Private equity firms KKR & Co and Roark Capital have also been vying for Papa John’s, with binding offers expected in the next few weeks, according to Reuters' sources.

Hedge fund Trian Fund Management, an investor in fast-food chain Wendy's that had expressed interest in Papa John’s, is said to be considering a potential investment should a deal for the sale of the company not be reached.

A special committee formed by Papa John’s board of directors is exploring a sale as part of a wide review of strategic alternatives, and there is no certainty that the company will agree to a sale, the sources added.

No matter who buys Papa John's, investors care most about what the pizza chain might be worth in the event of an acquisition. Jefferies analyst Alexander Slagle recently said that Papa John's is likely to be valued at $63.50 per share during an acquisition — 18% above where shares settled on Tuesday. Slagle made the conclusion by comparing Papa John’s potential deal with Inspire Brands' recent purchase of Sonic.

Pap John's was down 6% this year through Tuesday.

* An earlier version of this post incorrectly stated the private equity firms were trying to buy the 30% stake owned by the former CEO and chairman John Schnatter.

Read more stories on Papa John’s:

• Here's the math to figure out how much it could cost to take over Papa John's

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