Bally Total Fitness has reached an agreement with two groups who planned to offer proposals at the company’s annual meeting at the end of this month.
Bally has agreed to redeem its stockholder rights plan as part of an agreement reached with Liberation Investments and Amalgamated Bank LongView SmallCap 600 Index Fund. Liberation and Amalgamated have agreed to withdraw the stockholder proposals recently put forth for consideration at Bally's upcoming annual meeting. In conjunction, Liberation has terminated its solicitation of proxies with respect to all of its proposals, including separation of the offices of CEO and chairman of the board, removal of the company's stockholder rights plan and declassification of the company's board of directors. Amalgamated has agreed to withdraw its board declassification proposal.
Bally's board of directors will redeem the company's existing stockholder rights plan immediately. The board will also adopt a "poison pill" policy under which any new poison pill will require prior stockholder approval. The independent directors of the Board may act on their own to reinstate a pill so long as the board subsequently submits the pill to a binding stockholder vote by the later of the Company's next annual meeting or 270 days after the pill is adopted, the company said.
"[These] actions reinforce our strong commitment to enhancing stockholder value and promoting good corporate governance," Bally Chairman and CEO Paul Toback said.
As part of this commitment, Toback highlighted initiatives such as, actively engaging in discussions with several major financial institutions about the refinancing of the company's $100 million securitization facility; new marketing campaigns that continue to drive strong leads and new member joins; continuing implementation of aggressive cost cutting programs, including the elimination of redundancies and inefficiencies within the organization.
Liberation owns approximately 5.8 percent of the Bally's outstanding shares. Liberation majority member Emanuel Pearlman said, "Going forward, we anticipate supporting the company's efforts to enhance stockholder value."