Blackhawk Network Plans IPO of Shares Valued at $200 Million

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, the second-largest U.S. grocery chain, is selling a minority stake in Blackhawk as industry newsletter the Nilson Report predicts U.S. consumer spending on such cards may reach $274.7 billion in 2016, a 48 percent increase from 2011. Safeway had announced its IPO plan in September.

Blackhawk didn’t say today how many shares it will offer or at what price. The company said it applied to list shares on the Nasdaq Global Select Market under the symbol “HAWK.” The IPO will be led by Goldman Sachs Group Inc. (GS), Bank of America Corp., Citigroup Inc. and Deutsche Bank AG.

Blackhawk’s products include gift cards to restaurants, retail and grocery stores in the U.S., Canada, Europe, Mexico and Australia, and online. The company also makes cards and has introduced digital-wallet services.

Safeway rose 2.2 percent to $24.91 in New York on March 15. The Pleasanton, California-based company had advanced 38 percent this year, while the Standard & Poor’s 500 Index gained 9.4 percent.

The company is facing more competition from big-box discount stores such as Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) Safeway earns commissions, which are recorded as other revenue, from Blackhawk card sales, according to a company filing.

Kroger Co. (KR) is the largest U.S. supermarket chain.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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