Oct. 19, 2015 -- The company today announced that Oprah Winfrey is paying about $43 million for a 10% stake in Weight Watchers and is joining the company's board. Shares were up almost 75% trading on word of the deal.
Weight Watchers International Inc. said in a filing with the SEC that as part of a five-year agreement, Winfrey has given the company the right to use her name, image, likeness and endorsement for the company, its programs, products and services, subject to her approval. She will also make personal appearances on the company's behalf.
Ms. Winfrey has the right to use Weight Watchers marks to collaborate with and promote the company, its programs, products and services. Winfrey will consult with the companby and help in the development, planning and execution of its program and related initiatives.
"We are expanding our purpose from focusing on weight loss alone to more broadly helping people lead a healthier, happier life," said Weight Watchers President and CEO Jim Chambers said in a written statement.
Ms. Winfrey is buying roughly 6.4 million shares of Weight Watchers at $6.79 per share. She will also receive options to buy an additional 5% of the company's fully diluted shares. Weight Watchers' board expands from 9 to 10 members with Winfrey's inclusion. The agreement has additional successive one-year renewal terms. Winfrey's term on the Weight Watchers' board expires in 2018.
It's about time the company did something bold, and added a woman (who has struggled with weight issues all her life) to the ranks of top management. This should be a major boost to the company's image, on the order of using Jennifer Hudson as an effective ad spokesperson a few years ago. However, it remains to be seen what the big new program innovation will be, planned for December, and how that resonates with prospective customers.