NEW YORK — Safeway adopted a plan to prevent a hostile takeover after learning of a significant accumulation of its stock by an unknown 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.
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 has been unable to confirm who the investor is and spokesman Brian Dowling said that Safeway couldn't be more specific about the size of the stake that the investor had accrued.