(Adds details, shares)
June 28 (Reuters) - Fred's Inc, which is buying stores from Rite Aid as part of the company's deal to be acquired by Walgreens, said its board adopted a shareholder rights plan in light of "increased trading activity" ahead of a decision on the deal.
Fred's said on Wednesday the short-term rights plan, also known as a "poison pill", will be triggered if a party takes 10 percent ownership 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.
Walgreens Boots Alliance Inc agreed to buy Rite Aid Corp in October 2015, but the deal, which will merge the No. 2 and No. 3 U.S. drug store chains, has faced tough regulatory scrutiny. The closing date has been already been extended twice.
In December, Fred's agreed to buy 865 Rite Aid stores, but the deal is contingent on Rite Aid winning regulatory approval.
The more than one-and-a-half year antitrust scrutiny has raised uncertainity and weighed on Fred's shares, which has lost about 40 percent since the company's deal with Rite Aid.
The Federal Trade Commission, the U.S. antitrust watchdog, is expected to reach a decision on the deal by July 7.
Fred's shares were nearly unchanged at $12.08 in morning trading on Wednesday. Walgreens shares were up 0.7 percent at $77.82, while Rite Aid was up 4.5 percent at $3.91. (Reporting by Gayathree Ganesan in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)