Troubled pizza chain Papa John's gets $200 million from Starboard

Shares of Papa John's gained 11% in premarket trading

Starboard Value will make its CEO the chairman of Papa John’s International via a $200 million investment in the troubled pizza chain. The activist fund’s CEO, Jeffrey Smith (pictured), will take over the board role after Papa John’s founder John Schnatter stepped down as chairman last year after report emerged that he used a racial slur.

Shares of Papa John’s gained 11 percent in premarket trading.

Papa John’s plans to use the proceeds to repay debt and invest in the business, it said in a statement. Starboard is making its investment through the purchase of new convertible preferred stock, and the deal includes the option of an additional $50 million investment