Safeway (SWY) is allowing shareholders to acquire stock at a discounted rate — a move meant to stem a potential takeover.
Safeway announced that decision after learning of a significant stock accumulation by an unnamed investor.
The so-called “poison pill” announcement on Tuesday sent shares to a five-year high.
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 grocer, which also operates Vons, noted that it has taken a number of strategic initiatives to increase value for shareholders, including the recent $5.7 billion sale of its Canadian unit and the initial public offering of Blackhawk Network, its gift and prepaid card unit.
That sale and public offering was designed to help the company – the second-largest U.S. grocery-store chain — by righting some of its financial concerns.