Safeway adopts poison pill to prevent takeover

NEW YORK — Safeway adopted a plan to prevent a hostile takeover after learning of a significant accumulation of its stock by an investor.

The announcement Tuesday sent shares of the grocer spiking 8 percent to a five-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. In a filing with the Securities and Exchange Commission later Tuesday, Jana Partners disclosed that it had amassed a 6.2 percent stake in Safeway’s outstanding shares.

It said it “believes the shares are undervalued and represent and attractive investment opportunity.” The hedge fund said it has held and “may continue to have” talks with Safeway’s management regarding strategic alternatives, including a review of the markets where it operates and exiting lower-margin regions.

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.

A representative for Safeway wasn’t immediately available for comment.

The grocer, which also operates Vons, did point out the strategic initiatives it has undertaken 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.

Like other traditional supermarkets, Safeway is also trying to adapt amid growing competition from big-box retailers, drug stores and specialty stores that have been expanding their grocery sections.

A centerpiece of Safeway’s push to hold onto customers has been a loyalty program that offers personalized deals based on a shopper’s past purchases.

But in its most recent quarter, sales at company stores open at least a year rose 1.2 percent. By comparison, same-store sales at rival Kroger Co. rose 3.3 percent.

Whole Foods, which specializes in organic groceries, posted a 7.5 percent increase in comparable-store sales.

Shares of Safeway Inc., based in Pleasanton, Calif., jumped $2.44 to $30.68.

More in Herald Business Journal

Snohomish inventor makes changing beds magical

He hopes to make his big push in the hotel industry, where injuries to housekeepers are increasing.

Boeing planes designed for Alaska to make final flights

The special Boeing 737-400s carry cargo in the middle of the plane and 72 passengers in the rear.

Monroe’s Canyon Creek Cabinet names new exec VP

Mark Kovich has joined Monroe-headquartered Canyon Creek Cabinet Company as the executive… Continue reading

Century 21 North Homes Realty adds new agent in Lynnwood

Century 21 North Homes Realty has welcomed Adriene Crum to its Lynnwood… Continue reading

Longtime Comcast Everett employee travels to aid Houston

Lake Stevens resident and longtime Comcast Everett employee Brandon Johnson traveled to… Continue reading

Emory’s fun run raises $2,000 for Housing Hope, Beck’s Place

Proceeds from the 1st Annual Emory’s Silver Lake Fun Run on Labor… Continue reading

Happy accident leads Edmonds couple to make Hunniwater drink

The latest line of energy drinks by Karin and Eric… Continue reading

Single payer is no panacea for our costly health care system

We must address the cost of health care before designing an insurance system.

Voters are on the sidelines as the port fills a vacant seat

Troy McClelland resigned from the Port of Everett commission too late for an election before 2019.

Most Read