So what: Citing "three sources familiar with the situation," the New York Post notes Weight Watchers' 86% plunge over the past year has spurred one activist hedge fund to talk with potential partners about making Invus Group's Artal Group -- the company's majority shareholder with a 51% stake -- an offer. The hedge fund has also purchased the majority of Weight Watchers' remaining $144 million in senior loans due next April, the publication reported.
Now what: NYP's sources say including debt the offer could be around double yesterday's closing price around $4.09 per share. But the fact that Weight Watchers had jumped "only" 18% by the afternoon on the potentially massive offer underscores the challenges the unnamed hedge fund could have making a deal happen. To be sure, NYP notes Weight Watchers has been a massively profitable investment for Artal Group since it paid $224 million for the company in 1999. According to a Forbes report in 2012, over the next 13 years Artal collected $3.8 billion in cash from Weight Watchers and its debt.
In the end, I feel the need to reiterate that such takeovers are hardly guaranteed. So given the risk of any deal falling through in these early stages, I think Weight Watchers investors would be wise to take at least some of today's quick gains off the table while they still can.
Steve Symington owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.