09/17/2013 10:26 EDT | Updated 11/17/2013 05:12 EST

Safeway adopts poison pill plan after 'accumulation of significant amount' of stock

NEW YORK, N.Y. - 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 an all-time 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 per cent or more of the company's common stock, or 15 per cent 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 per cent to $30.26.