UPDATE 1-Jana Partners discloses Safeway stake

Tue Sep 17, 2013 4:03pm EDT

By Olivia Oran

Sept 17 (Reuters) - Hedge fund Jana Partners LLC disclosed in a regulatory filing on Tuesday that it had acquired a 6.2 percent stake in grocery chain Inc.

Jana said it has held talks with Safeway management about reviewing strategic alternatives for the Pleasanton, California-based company and that its shares are undervalued.

The hedge fund also said it has spoken with Safeway about exiting lower margin geographies.

Safeway said on Tuesday it had adopted a so-called poison pill to prevent an unwanted takeover of the company.

Safeway is working with investment bank Goldman Sachs Group Inc to defend the company against a takeover, according to a source. Goldman Sachs declined to comment.

Safeway sold its Canadian assets to Empire Co Ltd, the parent of Canada's second-largest grocery chain, in June for $5.7 billion.

It also spun off its gift card unit Blackhawk Network Holdings Inc earlier this year.

Safeway operates its namesake chain as well as the Vons and Dominick's stores.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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