PLEASANTON, Calif. — Safeway here said Tuesday that it has adopted a so-called “poison pill” to discourage an unfriendly takeover, saying it was aware unnamed investors had accumulated “a significant amount” of its stock.
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.
“The company has become aware of an accumulation of a significant amount of the common stock of the company,” Safeway said in a statement. “The board of directors believes that the rights plan will help promote the fair and equal treatment of all stockholders of the company and ensure that the board remains in the best position to discharge its fiduciary duties to the company and its stockholders.”
Safeway did not identify the buyer or buyers of its stock or specify how large a stake was taken.
“The company has recently undertaken a number of strategic initiatives including the IPO of Blackhawk Network and the pending sale of its Canadian assets,” Safeway added. “The board believes that the rights plan will help ensure that the company can continue to implement its strategic plan and maximize the long-term value of the company for all shareholders. The rights plan, which was adopted following evaluation and consultation with the company's outside advisors, is similar to plans adopted by numerous publicly traded companies.”
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