Ahold Delhaize appeases shareholders with poison pill compromise

By Bart H. Meijer

AMSTERDAM (Reuters) - Ahold Delhaize (AD.AS) on Wednesday managed to appease investors opposed to the extension of its takeover defence mechanism, by giving shareholders more rights if the poison pill is ever activated.

The Dutch-Belgian supermarket company decided to keep its defence mechanism, set to expire in December, in place for at least 15 years, even though a group of shareholders led by activist hedge fund CIAM had demanded a vote on the matter.

Ahold Delhaize insisted it did not need shareholders' consent to extend the mechanism, which enables an independent body to issue shares to thwart a takeover.

But it did alter the arrangement to take into account shareholders' wishes.

Under the new agreement, the company would call a shareholders' meeting to discuss the situation within six months of the option being exercised, and hold a vote on the cancellation of the issued shares within a year. The body holding the new shares will have no say in this vote.

These concessions were enough for CIAM to drop its request for an extraordinary shareholders' meeting to vote on the mechanism, and its warning that it would seek legal action if the company ignored its demand.

"These new commitments mark a significant victory for corporate governance and investor rights," CIAM co-founder Catherine Berjal said in a statement.

"We believe that this is the right decision for the company and we have the mandate to take it", Ahold Delhaize Chief Executive Dick Boer told reporters when announcing the extension of the defence mechanism earlier on Wednesday. "Shareholders will benefit with these commitments."

Boer said he and other board members consulted "more than 150 shareholders and other stakeholders" on the issue in recent months, including CIAM.

Similar mechanisms to defend against unwanted takeovers are common among Dutch companies.

Ahold Delhaize was formed in 2016 through the takeover by Ahold of its Belgian counterpart Delhaize.

The company has almost two thirds of its business in the United States, where analysts have said it might need to team up with another of the large American grocers to fend off rising competition from internet giant Amazon (AMZN.O).

(Reporting by Bart Meijer; editing by Jason Neely and Adrian Croft)