Pleasanton, Calif. -- Safeway Inc. announced that it has adopted a one-year stockholder rights plan, or a “poison pill,” to discourage an unfriendly takeover.
The company adopted the plan after it became aware that unnamed investors had accumulated “a significant amount” of its stock. The investor turned out to be hedge fund company Jana Partners, which disclosed in a filing that it has accumulated a 6.2% stake in the supermarket retailer.
Under the plan, Safeway will distribute one right to purchase preferred stock for every share of common stock owned as of Sept. 30. The rights would flood the market with additional shares if an outside investor accumulates more than 10% of its common stock, Safeway said.