Shares of Papa John's jumped more than 11 percent in the premarket Monday after The Wall Street Journal reported that Starboard Value is taking a $200 million stake in the company.
The report, which cited people familiar with the matter, also said Starboard CEO Jeffrey Smith will become the embattled pizza maker's chairman.
The activist investors is making its investment through a convertible stock purchase, which totals to a stake ranging between 11 percent and 15 percent of Papa John's' shares outstanding, the Journal said.
Monday's report comes after Papa John's started a special committee to review the relationship and arrangements made between the company and founder John Schnatter last year. Schnatter stepped down from his post as chairman in 2018 and resigned as CEO in December 2017 after a series of blunders, including using the N-word on a conference call in May.
This is a developing story. Check back for updates.