Shares of Tim Hortons up after report U.S. fund is pushing for changes

TORONTO – Tim Hortons Inc. (TSX:THI) shares traded higher Wednesday after a report that U.S. investment firm Highfields Capital is pushing for changes at the chain, including a big buyback of stock and a spinoff of its real estate holdings.

Reuters news agency, which cited documents and two sources,said Highfields wants the coffee and doughnut change to borrow $3.4 billion to buy back more than a third of its stock.

Highfields also wants Tim Hortons to create a real estate trust for its real estate assets and spin off or sell its distribution business.

Shares in Tim Hortons were up $2.06 at $56.64 in morning trading Wednesday on the Toronto Stock Exchange.

The U.S. investment firm holds a roughly 1.56 per cent stake in Tim Hortons.

The move by Highfields is the latest by a U.S. investment firm to push for change at a big Canadian company.

Earlier this year, Jana Partners pushed for changes at Agrium Inc. (TSX:AGU) but failed to win seats on the company’s board last month.

However, Pershing Square Capital Management was successful last year in making changes at Canadian Pacific Railway (TSX:CP) that saw the appointment of Hunter Harrison as chief executive.