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by Mercator Advisory Group 0

Blackhawk Network Holdings Inc., a division of Safeway Inc., has filed for a public offering to take its gift card distribution business public.

From a Bloomberg article:

Blackhawk Network Holdings Inc., a gift-card provider owned by Safeway Inc. (SWY), filed for a U.S. initial public offering as consumers increase prepaid spending.

The company filed to raise as much as $200 million, which is a placeholder that may change. The stock will be sold by existing investors including Safeway, according to a filing today with the U.S. Securities and Exchange Commission.

Safeway will retain a controlling interest in the company, and Blackhawk’s business will remain closely tied to the grocery chain’s core operations. The company also has included anti-takeover provisions, which could limit the value of the stock, according to its filing statement. Additionally, Blackhawk will receive much in the way of additional funds to invest in growing its business or acquiring other companies, judging by the ‘Use of Proceeds’ statement in its S-1.

The selling stockholders are selling all the shares of Class A common stock being sold in this offering, including any shares sold upon exercise of the underwriters’ option to purchase additional shares. Accordingly, we will not receive any proceeds from the sale of shares of our Class A common stock by the selling stockholders in this offering, except to the extent such stockholders exercise options or warrants in connection with such sales, which amounts are not expected to be material. Safeway has agreed to pay substantially all of our expenses of the offering.

Click here to read more from Bloomberg. Read more from Blackhawk’s S-1 here.

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