Weight Watchers’ losses spark hedge fund appetite

The recent underwhelming performance of Weight Watchers International, the listed global weight management and diet company, has seen it become subject to takeover rumours by an as-yet unnamed activist hedge fund.

Not surprisingly, Weight Watchers' share price rose yesterday on the back of this speculation, ending a downward trajectory that started in mid-November 2014 and, with the exception of a slight rally in mid-April, had continued to fall. Add into the mix declining year-on-year revenues in 2013 and 2014 and it’s quite easy to see why the company might be the subject of a possible takeover bid.

Sources close to Weight Watchers confirmed that a hedge fund has recently acquired a significant portion of the company’s outstanding loans and if the aim of this hedge fund was to arrest the continuing share price fall, then releasing information on this potential takeover appears to have worked, albeit temporarily!

It remains to be seen whether outside of the world of hedge funds any other corporate has the appetite to buy Weight Watchers at this point in time.