Jana Partners discloses Safeway stake-Reuters

(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 Safeway Inc (SWY.N).

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 (GS.N) 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 (EMPa.TO), 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 (HAWK.O) earlier this year.

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