SAFEWAY HIKES STAKE IN PARTNERSHIP

PLEASANTON, Calif. -- Safeway here has acquired additional interests in SSI Equity Associates, a limited partnership whose sole assets are warrants to purchase Safeway common stock at $1 per share.

ade its first acquisition in the partnership last January, when it purchased 31.8% of the interests for $113 million. It said the latest interests were purchased from a party unrelated to Safeway or any of its affiliates.

The company, which operates 1,050 stores, also said it may acquire additional interests in the future, depending on market conditions and other factors.

According to Safeway, the latest acquisition of warrants -- which it considers equivalent to common stock -- will reduce the common stock equivalents by 3.1 million shares. That, in turn, will slightly increase earnings per share in the fourth quarter; Safeway said.

But the favorable effect on earnings per share will be partially offset by interest expense on the bank borrowings.