Safeway Adopts Poison Pill After Big Stock Buys

NEW YORK (AP) — Safeway is adopting a plan to prevent a hostile takeover after learning of a significant accumulation of its stock.

The announcement Tuesday sent shares of the grocer spiking to a multi-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.

Safeway, which also operates Vons, noted that it has taken a number of strategic initiatives to increase value for shareholders, including the recent sale of its Canadian unit.

Shares of Safeway Inc., based in Pleasanton, Calif., jumped almost 8 percent to $30.26.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.