Weight Watchers stock rockets after Oprah Winfrey buys 10%, joins board
By Lindsey Rupp
(Bloomberg) — Oprah Winfrey will buy 10 percent of Weight Watchers International Inc. and join its board, giving the struggling provider of weight-loss programs a jolt of star power as it works to fend off cheaper digital rivals.
The shares more than doubled to $13.92 after the company announced the investment, which will come in the form of newly issued stock and include an option to buy an additional 5 percent. As part of the deal, Winfrey also has signed up with a Weight Watchers program and will share her experiences along the way.
Weight Watchers could use a boost. The company has suffered from falling sales and profit as consumers migrate to free, digital methods for counting calories and keeping in shape. With the Winfrey partnership, Weight Watchers is broadening its mission to helping people live a "healthier, happier life" instead of just helping them lose weight, Chief Executive Officer Jim Chambers said in the statement.
"I believe in the program so much I decided to invest in the company and partner in its evolution," said Winfrey, who'll also serve as an adviser to the company, helping with program development and execution.
Weight Watchers, about 51 percent of which is owned by Luxembourg-based Artal Group SA, had fallen 73 percent this year through last week. Winfrey, an actress and longtime talk-show host, is buying 6.36 million shares at a price of $6.79 apiece. That means she's putting $43.2 million into the company.
Weight Watcher's $2.05 billion term loan recorded its biggest gain ever, climbing 18.1 cents to 75.19 cents on the dollar, according to prices compiled by Bloomberg. The debt, which pays 4 percent, matures in April 2020.
Winfrey, who is CEO of the Oprah Winfrey Network LLC and chairman of the Harpo Entertainment Group, could also open the door for advertising partnerships to consumers already in Weight Watchers' demographic.