(Reuters) - Discount store operator Fred’s Inc (FRED.O) adopted a poison pill, less than a week after hedge fund Alden Global Capital LLC reported a 24.8 percent stake in the company.
Fred’s said on Tuesday that the shareholder rights plan would be triggered if a person or group acquired beneficial ownership of 10 percent or more of the company’s common shares.
The company said it adopted the plan after observing “unusual and substantial activity” in the company’s shares.
Alden Global reported its stake on Thursday, making it the company’s biggest shareholder, and said it would engage in discussions with Fred’s over its $950 million acquisition of 865 stores from Rite Aid Corp (RAD.N).
The rights issued by Fred’s under the plan will expire on June 26, 2019.
Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta