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May 12, 2021, 7:30 a.m. EDT

Papa John's to repurchase some of Starboard's stake, which is being converted to common stock

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By Tomi Kilgore

Papa John's International Inc. /zigman2/quotes/207343722/composite PZZA -0.30% said Wednesday that Starboard Value L.P.'s investment in preferred shares will converted to common stock, with the pizza seller repurchasing 31% of the preferred shares before the conversion. In 2019, Starboard had invested $250 million in Papa John's Series B convertible preferred stock with a total yield of about 5.4%, which were convertible to common stock at Starboard's option at a conversion price of $50.06. The stock closed Tuesday 93.8% above the conversion price at $97.01. At the time of the investment, Starboard's stake on a as-converted basis represented about 13.2% of the outstanding common stock. With Papa John's repurchase of preferred shares, Starboard's stake will be about 9.5% of the outstanding common stock. After the repurchase and conversion, the number of outstanding shares will increase by 3.5 million shares. The company will record a $110 million charge as a result of the transactions. Papa John's stock, which was still inactive in premarket trading, has lost 11.1% over the past three months, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.58% has gained 5.5%.

/zigman2/quotes/207343722/composite
US : U.S.: Nasdaq
$ 104.58
-0.31 -0.30%
Volume: 202,386
June 24, 2021 4:00p
P/E Ratio
54.16
Dividend Yield
0.86%
Market Cap
$3.47 billion
Rev. per Employee
$108,577
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/zigman2/quotes/210599714/realtime
US : S&P US
4,266.49
+24.65 +0.58%
Volume: 1.87B
June 24, 2021 5:29p
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