Shares in Weight Watchers soar over 90pc after Oprah Winfrey buys 10pc of company
Oprah Winfrey is paying around 43.2 million US dollars for a 10% stake in Weight Watchers and is joining the weight management company's board.
Shares of Weight Watchers nearly doubled after the deal was announced.
Weight Watchers International said in a filing with the Securities and Exchange Commission that as part of a five-year agreement, Ms Winfrey has given the company the right to use her name, image, likeness and endorsement for the company, its programmes, products and services, subject to her approval. She will also make personal appearances on the company's behalf.
For her part, Ms Winfrey has the right to use the Weight Watchers brand to collaborate with and promote the company, its programmes, products and services. Ms Winfrey will consult with Weight Watchers and help in the development, planning and execution of its programme 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 in a written statement.
Ms Winfrey is buying approximately 6.4 million shares of Weight Watchers at 6.79 dollars per share. She will also receive options to buy an additional 5% of the company's fully diluted shares.
The New York-based company's board expands from nine to 10 members with Ms Winfrey's inclusion.
The agreement has additional successive one-year renewal terms. Ms Winfrey's term on the Weight Watchers' board expires in 2018.
Weight Watcher's shares soared 6.09 dollars, or 90%, to 12.88 dollars in morning trading on Monday. Its shares had been down 73% for the year to Friday.