NEW YORK — Safeway adopted a plan to prevent a hostile takeover after learning of a significant accumulation of its stock by an investor.
The announcement Tuesday sent shares of the grocer spiking 8 percent to a five-year high.
So-called “poison pill” plans allow existing shareholders to acquire more stock at a discounted rate to discourage a takeover by an outside entity. In a filing with the Securities and Exchange Commission later Tuesday, Jana Partners disclosed that it had amassed a 6.2 percent stake in Safeway’s outstanding shares. It said it “believes the shares are undervalued and represent an attractive investment opportunity.” The hedge fund said it has held and “may continue to have” talks with Safeway’s management regarding strategic alternatives, including a review of the markets where it operates and exiting lower-margin regions.The Associated Press