Safeway Plans IPO Of Blackhawk Gift Card Unit

Safeway Inc.  said on Wednesday it plans to take its Blackhawk Network Holdings Inc gift card and payment services unit public in the first half of next year, sending the shares of the grocer up more than 4 percent.

Safeway, one of the largest U.S. supermarket chains, said it plans to file a registration statement for a potential initial public offering of a minority stake in Blackhawk, a move long- awaited by Wall Street investors.

Safeway shares closed 4.3 percent higher at $16.50 on the New York Stock Exchange.

Blackhawk, which analysts believe has substantially higher gross margins than Safeway's core business, sells prepaid gift, debit and telephone cards through thousands of retail outlets, including supermarkets, pharmacies and convenience stores. It also runs the payment and gift card infrastructure for Safeway and other retailers.

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