News

Newcastle directors purchase more Pizza Inn stock

June 27, 2004

THE COLONY, Texas—Two Pizza Inn directors, both of whom work for the chain's largest shareholder, Newcastle Partners, purchased small portions of the company's stock in early June, just weeks after Newcastle itself purchased about more than 38,000 shares of the 400-unit company's stock.

According to filings with the Securities and Exchange Commission, Newcastle Partners bought 38,350 shares of PZZI on May 10, increasing its holding in the company to 3.62 million shares (36.2 percent of outstanding shares).

On June 2, Newcastle President Mark Schwarz bought 5,000 shares, followed by the June 3 purchase of 4,000 shares by Newcastle vice president Steven Pully. The pair's purchase was somewhat offset by the June 3 sale of 6,000 shares from the 401k of Pizza Inn vice president Jim Shoemake (See correction below.) The cuts, management said, would save the company $1 million, which it plans to share with franchisees.

Though small, Newcastle's purchases of Pizza Inn stock continue to interest merger-and-acquisition watchers. Sources watching the developing story believe Newcastle may take Pizza Inn private sometime within the next 12 months.

Earlier this year, Newcastle won a bitter proxy battle for control of the struggling chain's board. (See related stories Largest Pizza Inn shareholder wants to expand board with two pizza veterans, Battle for the Board at Pizza Inn and Board battle over 'change of control,' millions in parachute payouts, ends at Pizza Inn.) Some PZZI shareholders say they are pleased with the direction Newcastle is leading the company since assuming board control in February.

* PizzaMarketplace originally reported Shoemake had been let go in the company's May 2004 downsizing. The information was incorrect, and we regret the error.