June 28 (Reuters) - Fred’s Inc said its board adopted a short-term shareholder rights plan in light of “increased trading activity” related to its involvement in Walgreens Boots Alliance’s deal to buy Rite Aid Corp .
Fred’s said the rights plan, also known as a “poison pill”, has a trigger of 10 percent and will expire on Sept. 25.
The company said the rights plan was to reduce the likelihood of any entity gaining control through open market purchases, and not in response to any specific takeover bid or other proposal to acquire control.
Rite Aid said in December it would sell 865 stores to Fred’s for $950 million to get regulators’ nod to approve its takeover by Walgreens.
The deal, which will merge the No. 1 and No. 3 drug store chains, is yet to get approval, with latest media reports suggesting regulators are seeking to block it. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Sriraj Kalluvila)