The Sports Club Co. today 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, the company’s 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.

Ahead of the news, Sports Club Co.’s stock was up nearly 3.7 percent on Thursday to trade at $1.70 per share.

In the same announcement, the Los Angeles-based company said it planned to sell six of its nine sports and fitness complexes to Millennium for $65 million, including three gyms in New York City 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.

The 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, which is slated to release earnings for the October-December period next week, has struggled financially of late, posting a net loss each year since 2000. In the quarter ended Sept. 30, 2004, it posted a net loss of $5.7 million (30 cents per diluted share) on revenues of $36.4 million.