Two of America’s most popular national pizza chains are getting closer to being sold to new owners as tougher competition, rising commodity costs and declining consumer demand drag on operations, according to five people familiar with the discussions. Papa John’s International and Pizza Hut, owned by Yum Brands, are actively negotiating separate deals that could remove each company from the spotlight of public earnings reports and stock exchanges, giving management teams time to rethink their strategy and business model, said the sources, who asked not to be identified because they are not authorized to speak publicly about private matters.

Papa John’s stock has fallen 28% over the past six months to around $34.99 a share on Tuesday. The company received a $47 per share offer from Qatar-backed investment fund Earth Capital, backed by Brookfield Asset Management, in March, according to two people briefed on the plans. Earth has been in talks with Papa John’s and has been conducting due diligence on a potential acquisition for the past month, two of the people said. Some investors are quietly optimistic that Irth can do a deal by the time Papa John’s releases its quarterly earnings on May 7, they said. Negotiations are still ongoing and no deal is guaranteed, the sources cautioned.

Meanwhile, Pizza Hut owner Yum Brands set another deadline for bidders to submit formal offers this week, three people familiar with the talks said.

So far, private equity firms Sycamore Partners, Apollo Global Management and Longrange Capital, among others, are vying for the chain, they said. Yum may choose to hold exclusive talks with someone after this week’s deadline, they added.

The three people said there was no guarantee the firms would submit bids this week, and that Yum could retain or close the chain if the offer isn’t high enough.

Representatives for Yum Brands, Papa John’s, Earth, Apollo and Sycamore declined to comment. Longrange did not immediately respond to a request for comment.

Food inflation has risen over the past year as interest in acquiring pizza chains rebounded in the first quarter amid major corporate deals and restaurants face growing uncertainties, from more cost-conscious and calorie-counting consumers. In 2025, several smaller restaurant chains left the public market: Denny’s sold to an investor group for $620 million and Potbelly to private convenience store chain Racetrack for $566 million. Canada’s MTY Food Group, which owns the Papa Murphy’s pizza chain, has also been exploring a sale since last year, Reuters reported. California Pizza Kitchen was purchased in December by a private investor group led by Consortium Brand Partners.

“Public (quick service restaurant) stocks are under pressure as soft consumer demand collides with persistent structural cost headwinds,” said Will Auchincloss, Americas retail sector leader at EY-Parthenon. “Traffic has weakened as consumers pull back, and at the same time brands are navigating an environment of higher labor costs and more competitive value.”

Pull on earnings

Weak same-store sales, declining revenue, intense competition and a succession of chief executives since the 2018 ouster of founder John Schnetter have weighed on Papa John’s stock price, which peaked at around $130 a share in late 2021.

Pizza Hut sales are also declining. The unit is dragging on Yum’s earnings as its other fast-food brands Taco Bell and KFC perform better. Any buyer would have to overhaul several dated positions, and going private would allow them to do so without having to scrutinize quarterly earnings reports, the people said.

Both pizza chains have said they need to shutter hundreds of locations to revive returns.

“For certain restaurant chains, being private gives the flexibility to reset the business and invest through this cycle without the pressure of quarterly earnings,” Auchinclos said.

The fate of both pizza chains was closely watched after Yum announced plans to undertake a strategic review of Pizza Hut in November and Papa John’s offered to sell at a significantly higher price last year. Papa John’s CEO Todd Penegore, who takes over at the end of 2024, said last month that he remained focused on running the business after Earth Capital’s offer became known. It follows a couple of bids from last year – a joint bid between Irth and Apollo, and then a solo bid from Apollo that was later withdrawn.

When asked about reports of potential bidders at a March 12 conference hosted by UBS, Panegor said he could not comment on rumors or market speculation.

“I mean it’s been 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 buzz around the brand,” he said.