Safeway said Tuesday that it has adopted a “poison pill” plan to prevent a hostile takeover. The grocery store chain put the measure in place after learning of a significant accumulation of its stock by an unnamed investor.
These types of 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.
The company, based in Pleasanton, Calif., runs its namesake chain along with Vons, Randalls, Tom Thumb and Carrs grocery stores. It also recently spun off its gift and prepaid card unit, Blackhawk Network.
Safeway, like its peers, has struggled with competition from big-box retailers, drugstores and dollar stores that have expanded their grocery sections.