TheChek News Flow

Problems for the well-known brand began with the Coronavirus pandemic and continued as prescriptions gained favour

A one-two punch of diet drugs and TikTok undermined one of the most trusted brands in fat loss, lawyers for WeightWatchers told a US bankruptcy judge on Thursday, as the bankrupt company seeks to reorganise into a slimmer version of itself.

WeightWatchers, officially known as WW International, Inc., filed for Chapter 11 bankruptcy protection on Tuesday night in a Delaware federal court with the company having already cut a pre-packaged deal to hand control of the business to secured lenders and bondholders.

As recently as 2018, WeightWatchers, whose core business relied on hosting workshops for people sharing the experience of fighting fat together, had $1.5bn in annual revenue and a market capitalisation of more than $7bn. Oprah Winfrey owned a tenth of the company and joined its board of directors.

But the Coronavirus pandemic gutted the WeightWatchers workshop model, and annual revenue fell to under $800mn by 2024. Winfrey left the company’s board last year. Its lawyers said it could no longer service a $1.6bn debt load because of an “evolution in consumer preferences and the rapid rise of GLP-1s”, and it was seeking an aggregate valuation of $700mn.

“Consumers are increasingly prioritising holistic health and rejecting traditional weight-loss narratives,” WeightWatchers wrote in a court filing submitted this week. 

“The rise of free and low-cost do-it-yourself (“DIY”) weight-loss apps reflects consumers’ growing demand for self-guided, flexible solutions. The DIY trend is further fuelled by influencers sharing personal success stories and guidance via social media, including Instagram, TikTok and YouTube.”

In 2023, WeightWatchers bought the telehealth start-up Sequence for $106mn. Sequence then became the company’s clinical offering that could prescribe GLP-1s like Ozempic and Wegovy. Still, the company remained largely wedded to the workshop model even as its subscriber count fell 12 per cent to 3.3mn in 2024, and its new prescription business failed to make up the difference.

By comparison, Him and Hers, a telehealth company that went public in 2021 and also offers weight loss drug prescriptions, has seen its market capitalisation soar to more than $11bn. 

WeightWatchers is expected to exit bankruptcy next month. Its lawyers told the court current shareholders could get just under a tenth of the company’s reorganised equity, potentially worth $20mn or $30mn, if certain milestones are hit during the bankruptcy process.

Last year, the company’s then chief executive officer, Sima Sistani, told the FT that WeightWatchers was attempting to be a judgment-free “weight health” company embracing “a full spectrum of solutions”. She left the company five months later.

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With an unclear deal and the Gaza war continuing, top carriers have no plans to return to the Red Sea soon

Key Points

Shippers aren’t yet confident enough to return to routes through the Red Sea, despite a tentative cease-fire deal between the U.S. and Yemen’s Houthi militia.

The top five container-shipping companies said they were assessing the deal announced Tuesday by President Trump but had no immediate plans to return to the area where the Houthis began targeting merchant ships in late 2023 in response to the war in the Gaza Strip.

“We are not going back any time soon,” said Nils Haupt, a spokesman for German liner Hapag-Lloyd. “It’s a good development, but it needs a lot of security guarantees for the Red Sea to be considered safe for big merchant ships.”

Shippers said the area will remain volatile as long as the war continues. And while the Houthis and U.S. pledged not to attack each other while the cease-fire holds, the agreement is vague and makes no clear mention of ending attacks on commercial shipping, said Christopher Long, intelligence director at security firm Neptune P2P Group and a former British naval officer.

A Pentagon official said there is still work to be done to guarantee safe navigation, which could include limited Navy escorts for crossing ships as the truce begins and diplomacy to get the Houthis to stop attacking Israel. The Houthis said Wednesday that they fired drones at Israel. The Israeli military said it had intercepted a drone attack.

“It will take some time before the southern Red Sea is safe, and we are working on it,” the official said. “It will also depend on how the Houthis behave.”

Following more limited operations by the Biden administration last year, Trump ordered the Pentagon to escalate the bombing campaign in Yemen for nearly two months, aiming to stop Houthi attacks that have driven shippers away from one of the world’s most important waterways.

Traffic through the Red Sea is down by 60%. Carriers have switched to longer and more expensive routes around the Cape of Good Hope. Analysts say it could take months to restore shippers’ confidence.

Ellie Shafik, the executive in charge of intelligence at British maritime company Vanguard Tech, said U.S. maritime officials “have advised caution in terms of whether the latest cease-fire will result in lasting safety and security for commercial shipping in the Red Sea.”

The Houthis, who swept out of the mountains of Yemen to take over much of the country a decade ago, started to launch drones and missiles at Israel after Israeli forces entered Gaza following the deadly Hamas-led Oct. 7, 2023, attacks. They also began to attack international shipping that transited the Red Sea and nearby waters.

Commodities-data company Kpler said Wednesday that the shipping community will consider the Houthis a threat until they are disarmed or prevented from striking vessels, resulting in high war-risk premiums and a preference among shipowners to keep avoiding the area.

One of the points of confusion is whether the truce applies broadly to commercial shipping or just U.S. vessels. The Houthis said Wednesday they would continue to target ships linked to Israel. That is a definition they have applied in unpredictable ways previously, at times attacking vessels with a loose connection to the country or targeting others by mistake.

Any shooting in the narrow waterway will cause shippers to worry that their vessels could be hit accidentally or suffer collateral damage.

“Shippers are reticent to go back into the Red Sea when it’s really unclear how long this will last and who’s really affected—which shipping companies or which flags are going to be honored by the Houthis or not,” said Bryan Clark, a senior fellow at the Hudson Institute think tank in Washington.

Large maritime companies didn’t return to their Red Sea routes when the Houthis said in January they wouldn’t attack U.S. and British vessels during a Gaza cease-fire that ended up running for two months. The Yemeni militants resumed their attacks after Israel went back to war in the enclave.

Clark assessed that shippers would stick to their current routes until there is a more sustained end to Israel’s war in Gaza, where Israel’s government recently approved a major expansion of combat activity.

“Going back to their previous routes would be costly, and then if they had to shift back again because the Houthis begin attacks again, they’re just going to lose money every time that happens,” said Clark, a former strategic planner for the Navy. “So if you’re a shipping company you might say, ‘I’m going to wait it out and see if there is an enduring end to the conflict.’”

While deals globally are drying up, one sector went ahead — and even paid full prices

Fear is powerful motivator. Lately, anxiety over tariffs and general global disarray has discouraged would-be buyers of companies from taking the plunge. But for some, the fear of not doing a deal can be worse.

Amid President Trump’s capricious trade policy, the number of deals signed globally in April fell to the lowest in at least 20 years, according to Dealogic data. Bankers the world over are bemoaning the withering of their carefully-tended M&A pipelines. 

Yet one group ploughed ahead: private equity. In the US, leveraged buyouts led by these well-upholstered firms totalled $46bn last month. That’s a 25 per cent increase compared with April last year and almost twice the three-year monthly average.

It is helpful that the sectors private equity likes, such as tech and healthcare, are relatively shielded from trade tensions. Some of April’s largest transactions were in this space, from Thoma Bravo’s $10.5bn acquisition of Boeing’s software business to Silver Lake’s purchase of a majority stake in Intel’s Altera for $4.5bn.

The other reason for private equity’s undiminished appetite is that it is sitting on a lot of cash. Globally, dry powder — capital which has been raised to fund deals but has not yet found a home — was $1.2tn at the end of 2024, according to Bain & Co. Of this, almost a quarter has been sitting around for at least four years. Given the average lifespan of a private equity fund is about a decade, and investments are typically held for five to seven years, use-it-or-lose-it time is rapidly approaching. 

With a lot of cash to throw around, private equity buyers not only went ahead with planned deals. They paid full prices, too. At Boeing, proceeds from the software disposal were well ahead of the $6-$7bn that Barclays analysts were expecting. The majority stake in Altera went for 5.7 times trailing revenue — about 2.5 times what Intel itself trades on. 

Of course, wanting to do deals during market ructions and pulling them off are two quite different things. And it does seem that some financing sources — such as the high-yield bond market — were temporarily frozen amid the uncertainty.

But banks didn’t completely shut up shop. And private credit funds marched on unfazed. Apollo and Blackstone led Thoma Bravo’s $4bn financing. In Europe, in an admittedly thin market, private credit provided financing to twice as many LBOs as the broadly syndicated market did in April, according to PitchBook LCD data.

There is one itch this does not scratch. Private equity firms also seek a way out of the assets they already own. And it doesn’t add up to anything like the deal flow that investment bankers were hoping for. But it does suggest that in the perpetual tug of war between greed and fear, the fear of losing out may prevail.

Altice creditors brace for next showdown with Patrick Drahi

Analysts and investors believe restructuring of international business could be more aggressive than French unit

Altice bondholders have formed an alliance to bolster their position ahead of the next round of restructuring of Patrick Drahi’s heavily indebted telecoms empire, just two months after the billionaire struck a €24bn deal with creditors of his French business.

Investment firms holding about 85 per cent of the €8.2bn of top-ranking debt at Altice International have signed a co-operation agreement to prevent creditors from being picked off through side deals, even though the company has said no talks are imminent.

Drahi, a Franco-Israeli telecoms mogul whose sprawling group borrowed more than $60bn of debt in an era of cheap money that now needs to be renegotiated, in late February struck a deal for Altice France that involved handing over a 45 per cent stake in the company to creditors in exchange for a substantial debt writedown. 

While Altice France’s management angered bondholders a year ago by raising the prospect of aggressively shifting assets away from them, the restructuring negotiations concluded amicably, with creditors set to profit if Drahi is able to sell off assets in line with expected valuations.

However, some analysts and investors believe there is a greater risk of asset stripping for bondholders at Altice International than at Altice France, because specific quirks of French law prevented Drahi from taking the most aggressive course of action.

Altice International houses the group’s assets outside of France and the US, with operations in Portugal, Israel and the Dominican Republic.

Some large investment firms that played a significant role in the Altice France restructuring — such as Pimco and Elliott Management, the two largest bondholders in the French process — have shied away from getting involved in Altice International.

London-based credit fund Sona Asset Management is the largest creditor at Altice International, according to people familiar with the matter, followed by PGIM, the asset management arm of the American life insurance firm Prudential Financial. 

The creditor group, which is advised by US law firm Gibson Dunn, also includes large asset managers such as Invesco and BlackRock, alongside hedge funds such as King Street Capital Management and Arini Capital Management.

One large holder of Altice International’s debt said that while the bondholder group was wary of manoeuvres aimed at shifting assets away from them, it appeared that Drahi was again looking to strike a consensual deal with creditors if possible. 

Separately, US hedge fund GoldenTree Asset Management is one of the largest holders of Altice International’s €675mn of unsecured bonds, the people added. These lower-ranking bonds are trading at just 35 cents on the euro, suggesting bondholders are braced for heavy losses.

Altice said that restructuring talks at its international business were not on the “2025 agenda”, with “absolutely no urgency at all” on the maturities of its debt.

Substantial loans that Altice International made to related parties could draw scrutiny from bondholders as restructuring negotiations kick off, with more than €4.5bn of loans outstanding to its parent company Altice Luxembourg at the end of 2024.

Altice International also previously lent about €600mn to an investment vehicle Drahi used to build a 24.5 per cent stake in BT. This loan was not repaid when Drahi sold his stake in the London-listed telecoms company last year, however, and was instead shuffled so the money is now owed from another Altice entity.

Bankers, bondholders and rival executives believe that Drahi is potentially looking to exit his home market of France entirely, with mobile operator SFR an attractive target if competition regulators allow consolidation to take place. Bouygues, Xavier Niel’s Iliad and Orange are the other major operators in the French market.

SFR would probably have to be broken up to appease competition regulators, which may still veto any deal that raises prices for French consumers or risks job losses.

Altice said it “declined to comment on French rumours” and that it was focused on “implementing the debt agreement, considering the sale of non-core assets, and continuing SFR’s commercial revival and improving service quality”.

Away from France, Drahi has previously examined sales of the major units comprising Altice International and could restart these processes. Most notably, Saudi Telecom reportedly offered €8bn for its Portuguese business, although talks collapsed last year without a deal. 

“Everything is for sale,” said an executive at another telecoms company.

Swatch investor takes aim at family behind Omega and Longines

Steven Wood accuses the Hayek family of sidelining minority shareholders in Swatch Group as he campaigns for board seat

Swatch Group investor Steven Wood has said the struggling Swiss watchmaker is “only being run for one shareholder”, as he steps up his campaign to be elected to the board of the family-controlled company.

Wood, founder and chief investment officer of New York-based GreenWood Investors, said in an interview with the Financial Times that the group behind Omega, Harry Winston and Breguet is mired in “a situation where minority shareholders’ rights are being ignored”.

The comments are a thinly veiled criticism of the Hayek family, which own 25 per cent of Swatch’s shares but control 44 per cent of the voting rights. Nick Hayek Jr, son of Swatch founder Nicolas Hayek, has served as chief executive since 2003. His sister Nayla has chaired the board since 2010.

GreenWood, which owns a 0.5 per cent stake in the company worth about Swf37mn, has tabled a resolution for Wood to be elected to Swatch’s board at the company’s annual general meeting on May 21.

The Hayek family are coming under pressure after years of underperformance that has prompted Nick Hayek, the chief executive, to repeatedly raise the prospect of taking the company private. Swatch reported a 75 per cent fall in net profit to Swf219mn last year.

“The undervaluation is eye-opening. Swatch trades at about half its book value,” said Wood, who added he had been engaging with the board since June. “This is a once in a lifetime opportunity in the luxury space,” he said.

Wood’s campaign is a rare example of shareholder activism in Switzerland, where many companies are controlled by powerful families.

Swatch has a dual class share structure. The Hayek family own mostly registered shares, which carry greater voting rights than bearer shares, many of which are held by institutional investors. Wood wants to serve as a representative for holders of bearer shares, which represent 55 per cent of Swatch’s share capital.

Wood describes himself as a “constructivist” rather than an activist. He wants Swatch to communicate more openly with investors, an approach he has also pursued at Italian-listed aerospace and defence group Leonardo, where he has served on the board since 2023.

Many of Wood’s ideas are aligned with analysts and shareholders, according to Jean-Philippe Bertschy, head of Swiss equity research at Vontobel.

“All investors agree with what he says. It is a good thing to have some healthy pressure on the Hayek family,” he said.

Swatch’s board has recommended shareholders vote against Wood’s resolution for several reasons, including that he is not Swiss and does not live in the country. The company said Jean-Pierre Roth, a former president of the Swiss National Bank who has served on Swatch’s board since 2010, is the designated representative of Swatch’s bearer shareholders.

Swiss proxy group Ethos Foundation, which represents Swiss pension funds and has previously expressed concern over Swatch’s corporate governance, has recommended voting in favour of Wood’s election.

However, another proxy agency, ISS, advised shareholders to vote against Wood’s election because he had not laid out a sufficiently compelling case. ISS also advised investors to vote against the re-election of most Swatch board directors on the basis that the company has failed to establish a sufficiently independent board.

Swatch has not given its bearer shareholders the opportunity to elect their board representative, without the input of registered shareholders. This is a violation of their rights under Swiss law, according to Wood.

Swatch said it would ensure the proposal is dealt with in a “legally correct manner” at the AGM and it has acted in full compliance with all national laws and regulations.

Wood said that Orbis Investment Management, which owns a 1 per cent stake in Swatch, had given him its backing.

But if the Hayek family succeed in blocking Wood’s appointment to the board this month, he will consider seeking the required backing of five per cent of shareholders to be able to call an extraordinary general meeting.

He would use that to request a separate vote, among Swatch’s bearer shareholders alone, to be elected as their board representative.

“There are many different paths this could take,” he said. “May 21st is not the end of the story.”