CHICAGO—Bally Total Fitness’ two largest shareholders are taking a closer look at the fitness chain after news that the company didn’t receive any suitable proposals for a sale or merger. Bally’s shares increased 18 percent when Pardus Capital Management, the company’s largest shareholder with a 14.8 percent stake in the company, signed a confidentiality agreement with the company. As part of the agreement, Pardus will be able to evaluate nonpublic information and possibly negotiate a strategic transaction. Liberation Investment Group also signed a confidentiality agreement with Bally on Aug. 22.

The company also announced the resignation of Dr. James McAnally, the medical director of nephrology services at Trinitas Hospital in Elizabeth, NJ. He has served on the board since Bally went public in 1996.

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