Jana Partners acquires Safeway stake

September 17
9:08 PM 2013

In a regulatory filing on Tuesday, hedge fund Jana Partners LLC said it had acquired a 6.2% stake in grocery chain Safeway Inc.

Jana said that it had held discussions with Safeway's management about reviewing strategic alternatives for the giant grocery chain. The hedge fund also added that Safeway's shares were undervalued. Jana added it had spoken with Safeway about exiting lower margin locations.

On Tuesday, Safeway said it had adopted a so-called poison pill to prevent any unwanted takeover of the grocery chain operator. Safeway Inc. had worked with investment bank Goldman Sachs Group Inc. to defend the company against a takeover, said one source. When asked about the report, Goldman Sachs refused to comment.

In June, Safeway sold its Canadian assets to Empire Co Ltd. in a transaction valued USD5.7 billion. Earlier this year, Safeway had also spun off its gift card unit Blackhawk Network Holdings Inc. The grocery operator also operates Vons and Dominick's stores.

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