Lucky Stores Inc. has rejected an unsolicited $1.74 billion bid from Salt Lake-based American Stores Co. and instituted anti-takeover actions meant to keep the company independent.
But a few hours after rejecting the American Stores bid Thursday, the Dublin, Calif.-based retailer indicated, in documents filed with the Securities and Exchange Commission, that new third parties had expressed interest in buying the company.In the filing, Lucky said its board had authorized management to make arrangements for third parties interested in buying Lucky to have the opportunity to review confidential information about the company.
Lucky declined to name the parties.
Earlier, in rejecting the American Stores offer, Lucky's board also adopted a special plan that would give shareholders extra shares if a takeover foray is made. The action was meant protect the company against an unwanted takeover.
Attempts to reach American Stores executives for comment on what, if any, action they may now take, were unsuccessful.
American Stores is keen on acquiring Lucky so it can expand in California, where Lucky is very strong. Lucky already has an extensive retail operation, owning Acme Markets, Alpha Beta, Jewel Food Stores and Osco Drug, a vast stable that adds up to annual sales of over $20 billion.
But Lucky has not warmed up to the overtures, preferring instead to remain independent or possibly find a white knight.
Under the plan announced Thursday, called a warrant dividend, each existing share would be entitled to an additional share. Such a doubling in the amount of stock outstanding would force a raider to put up more money to pay for the extra shares or reduce its offer, making the bid less popular.
Target companies in the past have implemented such tactics as a way of thwarting unwanted takeovers.
"We believe the adoption of the warrant dividend plan will be a key element in enabling the board to pursue an alternative which will achieve Lucky the best results for our stockholders," said Lucky Chairman John Lillie.
In Thursday's announcement, Lucky said that its alternatives included a reorganization to focus on its California operations, a leveraged recapitalization and sale of the company to a third party.
Lucky said the warrant dividend plan is designed to protect stockholders against unsolicited attempts to acquire control of Lucky at prices found to be inadequate by the board.
Lucky shares on the New York Stock Exchange Thursday rose $3.50 to close at $52.25, above the $45 a share tender American already offered and the $50 a share it said it was prepared to pay if Lucky management would go along with a friendly transaction. The stock's rise suggested that investors might believe a sweeter bid could be forthcoming.