WeightWatchers 2010 Annual Report Download - page 26

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in 19
6
3. Weight Watchers International, Inc. was incorporated as a Virginia corporation in 1974 and succeeded
to the business started in New York in 19
6
3. Heinz ac
q
uired us in 1978.
Artal Ownershi
p
I
n Septem
b
er 1999, Arta
l
Luxem
b
our
g
, S.A., or Arta
l
Luxem
b
our
g
, acqu
i
re
d
us
f
rom He
i
nz. Arta
l
Luxem
b
our
gi
san
i
n
di
rect su
b
s
idi
ar
y
o
f
Arta
l
Group, S.A., w
hi
c
h
to
g
et
h
er w
i
t
hi
ts parent an
di
ts su
b
s
idi
ar
i
es
i
s
r
e
f
erre
d
to
i
nt
hi
s Annua
l
Report on Form 10-K as Arta
l
.Su
b
sequent to Arta
l
’s acqu
i
s
i
t
i
on o
f
us, Arta
l
Luxem
b
our
g
trans
f
erre
d
owners
hi
po
fi
ts s
h
ares
i
n us to Arta
l
Part
i
c
i
pat
i
ons an
d
Mana
g
ement S.A. an
d
Arta
l
Ho
ldi
n
g
s Sp. z o.o., eac
h
a
l
so mem
b
ers o
f
Arta
l
. Current
ly
, Arta
l
Ho
ldi
n
g
s Sp. z o.o.
i
st
h
e recor
dh
o
ld
er o
f
a
ll
o
ur s
h
ares owne
dby
Arta
l.
W
eightWatchers.com Ac
q
uisitio
n
I
n Jul
y
2005, we acquired control of our licensee and affiliate, Wei
g
htWatchers.com, b
y
increasin
g
our
o
wnership interest from approximatel
y
20% to approximatel
y
53%. Subsequentl
y
, in December 2005,
W
e
igh
tWatc
h
ers.com re
d
eeme
d
a
ll
s
h
ares owne
dby
Arta
li
n
i
t, resu
l
t
i
n
gi
n our current owners
hi
po
f
100% o
f
W
e
igh
tWatc
h
ers.com.
T
en
d
er O
ff
er an
d
S
h
are Repurc
h
ase
On December 18, 2006, we commenced a tender offer in which we sought to acquire up to 8.3 millio
n
shares of our common stock at a
p
rice between
$
47.00 and
$
54.00
p
er share, a transaction that we refer to in this
Annual Report on Form 10-K as the Tender Offer. Prior to the Tender Offer, we entered into an agreement wit
h
Artal whereby Artal agreed to sell to us, at the same price as was determined in the Tender Offer, the number o
f
its shares of our common stock necessary to keep its percentage ownership in us at substantially the same level
after the Tender Offer. Artal also agreed not to participate in the Tender Offer so that it would not affect th
e
determination of the
p
rice in the Tender Offer
.
The Tender Offer expired at midni
g
ht on Januar
y
18, 2007, and on Januar
y
26, 2007 we repurchase
d
approximatel
y
8.5 million shares at a price of $54.00 per share. These repurchased shares were comprised o
f
8
.3 m
illi
on s
h
ares t
h
at we o
ff
ere
d
to purc
h
ase an
d
approx
i
mate
ly
0.2 m
illi
on s
h
ares purc
h
ase
d
pursuant to ou
r
r
i
g
ht to purchase up to an additional 2% of the outstandin
g
shares as of November 30, 2006. On Februar
y
2,
2007, we repurchased approximatel
y
10.5 million of Artal’s shares at a purchase price of $54.00 per share
p
ursuant to our pr
i
or a
g
reement w
i
t
h
Arta
l
. In Januar
y
2007, we amen
d
e
d
an
d
supp
l
emente
d
our revo
l
v
i
n
g
cre
dit
f
ac
ili
t
y
to
fi
nance t
h
ese repurc
h
ases
.
Ch
ina
J
oint
V
enture
On February
5
, 2008, we entered into a joint venture with Danone Dairy Asia, an indirect, wholly-owne
d
subsidiary of Groupe DANONE S.A., to establish a weight management business in the People’s Republic of
China. Pursuant to the terms of the joint venture agreement, we and Danone Dairy Asia own
5
1% and 49%,
r
espectively, of the joint venture entity, Weight Watchers Danone China Limited. In connection with the joint
venture agreement, we entered into a license agreement in July 2008 to grant the China Joint Venture an
exclusive license within the People’s Republic of China to certain of our intellectual property rights for the
p
urpose of engaging in the operation of weight management classes, the manufacture and sale of branded
p
roducts in the meeting room, the publication of a weight management branded print magazine and the offer o
f
weight management products and services over the Internet. In consideration for granting these rights, we receiv
e
a royalty of ten percent on all the China Joint Venture’s revenues, net of certain taxes. The license agreement has
a term of ten years and is automatically renewable for successive ten year terms after that time. In September
2008, the China Joint Venture launched its first weight management services centers.
10