Board members of Papa John’s International Inc. are expected to discuss and possibly vote on Sunday on the use of a “poison pill” to keep founder John Schnatter from taking a controlling interest in the company, The Wall Street Journal reported, citing unnamed sources.
Schnatter stepped down as chairman of the pizza chain on July 11, after it came to light that he had used a racial slur during a conference call in May. He has been battling with board members since then, suggesting that he may have made a mistake in stepping down. In a letter to the board, he denied using a slur and that he wasn't a racist.
Schnatter, who had founded the company in 1984, owns about 30 percent of Papa John’s shares.
A company can use a shareholder rights plan – also known as a “poison pill” provision -- to prevent a hostile takeover, and make its shares unattractive to acquirers. This tactic can also be used to fend off activist shareholders.
A legal representative for Schattner declined to comment to CNBC.
The full article can be found on the Wall Street Journal’s website.