Safeway adopts poison pill after big stock buys

AP News
Posted: Sep 17, 2013 10:45 AM

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.

Believe Him
Katie Pavlich

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.