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

Peoples, HomeStreet banks bump lowest salaries after tax cut

The banks with Snohomish County branches will raise minimum salaries for employees to $15 an hour.

Electroimpact cuts Mukilteo staff by 9 percent

“What we’re missing now is a monster anchor project,” the company’s VP said.

Exotic animals find compassionate care in Bothell (video)

At the Center for Bird and Exotic Animal Medicine, vets treat snakes, hedgehogs and even kangaroos.

How can you tell if you are getting good financial advice?

Assume that it’s still the same buyer-beware market that has always existed.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

In this Dec. 20, 2017, photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. (AP Photo/Mark Lennihan, File)
Amazon’s potential HQ2 sites leaves many cities disappointed

And yet, some municipal leaders are looking at the bright side of being rejected.

How do you retrieve an errant Boeing 737 from a muddy slope?

Turkish authorities used cranes to lift a plane that skidded off a runway.

Don’t take economic forecasts to the bank — or the casino

Air travel delays could spur a rebirth of passenger rail service.

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

Most Read