Oprah is literally putting her money where her mouth is. According to the company, actress and talk show personality Oprah Winfrey has bought a 10% stake in Weight Watchers and is also becoming a member of the board.
Weight Watchers International made public a filing with the SEC on Monday that it has signed a five-year deal with Winfrey, giving the firm the right to use her name, image, and endorsement in its programs, products and services, subject to Winfrey’s approval. Of note, the agreement also calls for Winfrey personal appearances for the company.
Weight Watcher shares are moving up smartly on the news of the Oprah Winfrey deal, with the stock trading up around 90% at $12.88 per share in the premarket Monday.
Statement from Oprah Winfrey and Weight Watchers CEO
“Weight Watchers has given me the tools to begin to make the lasting shift that I and so many of us who are struggling with weight have longed for,” Winfrey commented. “I believe in the program so much I decided to invest in the company and partner in its evolution.”
“We are expanding our purpose from focusing on weight loss alone to more broadly helping people lead a healthier, happier life,” boted Jim Chambers, President and CEO, Weight Watchers International, Inc. “Through our conversations, it became clear that there is tremendous alignment between Oprah’s intention and our mission. We believe that her remarkable ability to connect and inspire people to realize their full potential is uniquely complementary to our powerful community, extraordinary coaches and proven approach.”
More on Winfrey taking 10% stake in Weight Watchers
According to the statement released by the company, Winfrey has bought 6.4 million shares of Weight Watchers at $6.79 per share. Of note, she also has option to buy an another 5% stake in the company in the future.
The BoD of Weight Watchers will expand from nine to 10 members with Winfrey joining the group.
Of note, the deal is structured as a series of successive one-year renewals. Winfrey’s term on the Weight Watchers’ board will currently expire in 2018.
The company has been under pressure lately as free apps erode the “moat” which the company once possessed. The stock has been the topic of a hot debate between activists and shorts.