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Safeway Inc.
today announced that it has adopted a one-year stockholder
rights plan.
The Company has become aware of an accumulation of a significant
amount of the common stock of the Company. The Board of Directors
believes that the rights plan will help promote the fair and equal
treatment of all stockholders of the Company and ensure that the
Board remains in the best position to discharge its fiduciary duties
to the Company and its stockholders.
The Company has recently undertaken a number of strategic initiatives
including the IPO of Blackhawk Network and the pending sale of its
Canadian assets. The Board believes that the rights plan will help
ensure that the Company can continue to implement its strategic plan
and maximize the long-term value of the Company for all shareholders.
The rights plan, which was adopted following evaluation and
consultation with the Company's outside advisors, is similar to plans
adopted by numerous publicly traded companies.
Under the plan, one preferred stock purchase right will be
distributed for each share of common stock held by stockholders of
record on September 30, 2013. Under certain circumstances, each right
will entitle stockholders to buy one one-thousandth of a share of
newly-created Series A Junior Participating Preferred Stock of the
Company at an exercise price of $100. The Company's Board of
Directors will be entitled to redeem the rights at $0.01 per right at
any time before a person or group has acquired 10% or more (15% or
more in the case of a passive institutional investor) of the
outstanding common stock. The rights will expire on September 15,
2014, subject to the Company's right to extend such date, unless
earlier redeemed or exchanged by the Company or terminated.
Subject to limited exceptions, if a person or group acquires 10% or
more of the outstanding common stock (15% or more in the case of a
passive institutional investor) of the Company (including in the form
of synthetic ownership through derivative positions), each right
(other than those held by that person or group) will become
exercisable and entitle its holder to purchase, at the right's
then-current exercise price, a number of shares of common stock
having a market value at that time of twice the right's exercise
price. If the Company is acquired in a merger or other business
combination transaction that has not been approved by the Board of
Directors after the rights become exercisable, each right will
entitle its holder to purchase, at the right's then-current exercise
price, a number of shares of the acquiring company's common stock
having a market value at that time of twice the right's exercise
price.
For administrative convenience, the rights will automatically attach
to the shares of common stock, trade together with those shares and
will be represented by certificates representing the common stock.
The rights distribution is not taxable to stockholders. Stockholders
are not required to take any action to receive the rights
distribution. Until the rights become exercisable, outstanding stock
certificates (or, in the case of shares reflected on the direct
registration system, by the notations in the book-entry account
system of the transfer agent for the shares) will represent both
shares of the Company's common stock and the rights. The issuance of
the rights will have no dilutive effect and will not impact reported
earnings per share for the Company.
Further details about the rights plan will be contained in a Form 8-K
to be filed by the Company with the U.S. Securities and Exchange
Commission.
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