The Securities and Exchange Commission last week blocked Calabasas-based homebuilder Ryland Group Inc. from removing an environmentalist group's resolution from its proxy ballot.

Ryland sought to delete the proposal from New York-based Nathan Cummings Foundation, which seeks to require the company to find ways to reduce greenhouse gas emissions those caused by construction and emissions produced by the materials in homes.

The proposal would require the formation of an independent committee of the board, which would prepare a report on how the company is responding to rising regulatory, competitive and public pressure to increase energy efficiency and reduce greenhouse gas emissions. The vote is expected to take place in September, at Ryland's annual shareholder meeting.

Ryland argued that it should be able to remove the item because the proposal contains statements of opinion and seeks to "micro-manage" financial risks. In addition, the company says that stockholders aren't capable of making a judgment on the subject matter.

However, in a Feb. 1 letter, attorney-advisor Daniel Greenspan said the SEC wouldn't allow Ryland to remove the item. "We are unable to concur in your view that Ryland may exclude the proposal," he wrote. "Accordingly, we do not believe that Ryland may omit the proposal from its proxy materials."

"We feel this is a long-term shareholder issue," said Caroline Williams, the foundation's chief financial and investment officer. "If these issues aren't addressed it could hurt long-term shareholder value."

The foundation has placed similar ballot positions on the proxy statements of homebuilders Lennar Corp. and Centex Corp.

The foundation has been successful in getting automobile manufacturers and oil refinery owners to agree to reduce their greenhouse gas emissions.

"This is actually part of much larger global warming shareholder campaign," said Lance Lindblom, the foundation's president and chief executive. "The focus on homebuilders and real estate investment trusts is a new aspect of it."

Ryland spokeswoman Jyoti Nanda wrote in an e-mail that the initiative sought by the foundation covers topics the company already addresses. As a policy, the company uses energy-efficient appliances and products, Nanda wrote.
Andy Fixmer

Private Gym
Sports Club Co. last week announced a proposal by its four principal stockholders and their affiliates to take the company private and retire its outstanding senior secured debt.

Under the proposal, shareholders will receive $2 for each share of common stock they own through the merger of a newly formed entity owned by the company's four principal stockholders, Millennium Partners; Rex A. Licklider, its vice chairman, chief executive and interim president; Chairman D. Michael Talla; and Kayne Anderson Capital Advisors LP.

Prior to last Thursday's announcement, Sports Club Co.'s stock was trading at $1.70 per share.

The Los Angeles-based company also said it planned to sell six of its nine sports and fitness complexes to Millennium for $65 million, including three gyms in New York and clubs in Boston, Washington, D.C., and San Francisco. Millennium will also assume management of a club in Miami. The newly formed entity will own and operate three Sports Club/LA units, including clubs in Los Angeles, Beverly Hills and Irvine.

Sports Club Co. also intends to arrange for new financing and use that, along with a portion of the remaining proceeds of the asset sale, to retire its outstanding $100 million of senior secured notes due in March 2006.

The company announced in December it was considering acquisition offers for some or all of its assets, including a proposal from Millennium. Last month, Philip Swain resigned as president of the Sports Club and was replaced by Licklider on an interim basis.

The company, has lost money every year since 2000. In the quarter ended Sept. 30, 2004, it posted a loss of $5.7 million on revenues of $36.4 million.
Rebecca Flass

This and That
Van Nuys-based Cherokee Inc. signed an exclusive agreement with Arcila-Duque Interiors Inc. to represent home and product designer Juan Carlos Arcila-Duque. Under the terms of the deal, Cherokee will create licensing opportunities for the Juan Carlos brand, with the goal of offering home products. PMC Global Inc., the privately held industrial conglomerate in Sun Valley, sold its Gusmer Corp. unit to publicly-traded Graco Inc. for $45 million in cash. In a related transaction, Graco also acquired the stock of PMC's Gusmer Europe S.L. unit, based in Vilanova, Spain, for an additional $20 million. Los Angeles investment management firm Ares Management LLC has acquired a 50 percent stake in AmeriQual, an Evansville, Ind.-based provider of ready-to-eat meals used by military personnel. Guitar Center Inc. agreed to acquire the privately held Music & Arts Center chain, which includes 60 retail stores and seven instruction centers, for $90 million. The deal allows the Westlake Village-based company to build the music education side of its business and will also nearly quadruple the number of its stores. Guitar Center has operated 138 stores in 33 states. As part of the transaction, Guitar Center will assume about $8 million in debt and deferred obligations.

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