NEW YORK (AP) — Safeway is adopting a plan to prevent a hostile takeover after learning of a significant accumulation of its stock.
The announcement Tuesday sent shares of the grocer spiking to a multi-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.
Safeway's defensive plan becomes exercisable if a person or group acquires 10 percent or more of the company's common stock, or 15 percent by an institutional investor.
Safeway, which also operates Vons, noted that it has taken a number of strategic initiatives to increase value for shareholders, including the recent sale of its Canadian unit.
Shares of Safeway Inc., based in Pleasanton, Calif., jumped almost 8 percent to $30.26.