Town Sports Adopts Poison Pill, Declares Dividend Distribution

(RTTNews) - Town Sports International Holdings Inc. (CLUB) said its board of directors has adopted a stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock.

Town Sports noted that last week, in connection with rejecting its offer to provide an investor group representation on the board, the investor group sent a letter to the company demanding a majority of the seats on the board. The investor group holds about 26 percent of the company's outstanding common stock.

Further, the investor group suggested other actions that the Town Sports' board felt were inconsistent with its obligations to other stakeholders of the company. In light of the investor group's threats, the company's board has adopted the rights plan.

The company will submit the rights for stockholder approval at its 2015 annual meeting of stockholders and if approved at the meeting, the rights will expire in June 2016.

The dividend distribution will be made on January 12, 2015 payable to stockholders of record on that date, and is not taxable to shareholders.