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Two of the largest U.S. pizza chains, Papa John's International and Pizza Hut, are engaged in discussions that could lead to potential ownership changes, as ongoing cost pressures and softer consumer demand weigh on their performance, according to sources familiar with the matter.
Both Papa John’s and Pizza Hut, owned by Yum! Brands; are separately evaluating transactions that may take them private. Such a shift would enable the companies to restructure operations and reassess strategy away from the scrutiny of quarterly earnings reporting.
Shares of Papa John's International have fallen about 28 percent over the past six months, recently trading near $34.99 apiece. The company had received a $47-per-share proposal in March from Irth Capital, a Qatari-backed fund, with backing from Brookfield Asset Management.
Sources said Irth has been carrying out due diligence over the past month, with discussions still underway and no assurance of a transaction. Some investors are anticipating greater clarity ahead of the company’s earnings release scheduled for May 7.
In parallel, Yum! Brands has set a fresh deadline for potential bidders to submit formal offers for Pizza Hut. Private equity firms such as Sycamore Partners, Apollo Global Management, and LongRange Capital are among those assessing the opportunity. Yum is expected to shortlist a bidder for exclusive negotiations, though it retains the flexibility to hold on to or spin off the business if valuation expectations are not met.
Interest in these assets aligns with a broader pickup in large corporate deal activity in the first quarter, even as restaurant operators continue to navigate headwinds including rising input costs, cautious consumer spending, and intensifying competition across value segments.
Recent sector deals point to a similar trend. In 2025, Denny's was acquired by an investor group for $620 million, while Potbelly was bought by RaceTrac for $566 million. MTY Food Group, owner of Papa Murphy's, has also been exploring a potential sale. Meanwhile, California Pizza Kitchen was acquired in December by a private investor group led by Consortium Brand Partners.
Commenting on the broader market environment, Will Auchincloss, EY-Parthenon's Americas retail sector leader, said, "Public [quick service restaurant] stocks are under pressure as softer consumer demand collides with persistent structural cost headwinds. Traffic has weakened as consumers pull back, and at the same time brands are navigating higher labor costs and a far more competitive value environment."
Ongoing operational headwinds have continued to weigh on both pizza chains. Papa John's International has faced weaker same-store sales, declining revenues, and a series of leadership changes following the exit of founder John Schnatter in 2018. The company’s stock, which peaked at around $130 per share in late 2021, has since seen a significant decline.
Pizza Hut has also reported declining sales, weighing on the overall performance of Yum! Brands, even as other brands such as Taco Bell and KFC continue to outperform. Prospective buyers are likely to prioritise modernising legacy store formats and enhancing operational efficiency; initiatives that could be more effectively implemented under a private ownership structure.
Both companies have indicated plans to close hundreds of underperforming outlets as part of turnaround efforts. Auchincloss added, "For certain restaurant chains, being private offers flexibility to reset the business and invest through this cycle without the pressure of quarterly earnings."
Papa John’s CEO Todd Penegor, who assumed the role in late 2024, has maintained focus on business operations despite ongoing speculation. Addressing reports of potential bids at a March 12 conference hosted by UBS, Penegor said, "I mean it's been a constant, right? I've been in the role 18 months, and I think almost the full 18 months, we've always had some kind of rumor out there around the brand."
