CHICAGO — Bally Total Fitness will allow its stockholder rights plan, also known as the “poison pill,” to expire on July 15. The plan, which was implemented to discourage an unfair takeover of the company, protected shareholders as Bally filed its restated financial statements, according to the board. Rather than putting the plan up for stockholder vote, Bally board members decided to let the plan expire as scheduled in July.
The stockholder rights plan prevented shareholders from buying more than 15 percent of company stock in order to make near-term gains. In an Oct. 24 letter to the board, however, Kariim Samii, the leader of Pardus Capital Management, Bally's largest shareholder, said he viewed the plan as a way to entrench the management team. In January, dissident shareholders attempted to vote Paul Toback out of his position as CEO, but they didn't receive a sufficient number of votes.
Bally, which is still considering a possible sale of the company, plans to file its 2005 10-K report and quarterly report for the first three months of 2006 before the July 10 deadline, which was extended with consent from senior bank lenders and noteholders.