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Safeway to distribute Blackhawk shares

Safeway distributes Blackhawk shares to stockholders in form of dividend as part of sale

Safeway Inc. said Monday that it will distribute all of the shares it holds in Blackhawk Network Holdings Inc. as part of a special dividend to its shareholders.

The grocery store chain took the gift and prepaid card unit public last year and still owns about 72.2 percent of Blackhawk.

Safeway said in February that it planned to make the distribution as part of its plans to put itself up for sale.

The company has since secured a buyer, announcing earlier this month that it will be acquired by an investment group led by Cerberus Capital Management, the owner of Albertsons and several other supermarket chains. The deal is worth about $7.64 billion in cash, and pending other transactions could top more than $9 billion.

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Safeway declared a special stock dividend of 37.8 million Class B shares of Blackhawk. That represents nearly all of Blackhawk's Class B common stock and 72 percent of its common stock of all classes outstanding.

Its class B shares, which get more votes than Class A shares, are not currently traded on any stock exchange. But they are expected to be listed on the Nasdaq under the symbol "HAWKB" after the spin-off.

Safeway plans to distribute the stock April 14 to shareholders of record as of April 3. Shareholders are expected to receive about 0.164308 of a Blackhawk B share for each Safeway share held.

The distribution is expected to be taxable. The Pleasanton, Calif.-based company did not assign a cash value to the distribution.

Shares of Safeway fell 6 cents to close at $37.95, in line with broader market activity.