Tim Hortons faces pressure from another activist investor

Date: Tuesday, June 18, 2013
Author: Reuters

(Reuters) - Restaurant chain Tim Hortons Inc, which recently outlined plans to address the concerns of activist investor Highfields Capital, now faces pressure from another such investor.

U.S. hedge fund Scout Capital Management disclosed on Monday that it has raised its stake in the Canadian chain to 5.5 percent, up from about 1.5 percent as of the end of March.

The fund said it has engaged and plans to continue to engage in discussions with Tim Hortons' senior management on matters relating to its capital structure, capital expenditures, timing and magnitude of share repurchases, management compensation and other matters.

"We are focused on continuing our track record of creating shareholder value and always welcome constructive dialogue with our shareholders," said a spokeswoman for Tim Hortons in an email, while declining to provide any detail on the extent of the discussions between the two sides.

The disclosure comes less than two months after Tim Hortons indicated that it plans to raise its debt levels and buy back shares in a bid to address some of the concerns expressed by Highfields Capital.

 

As of early May, Highfields owned a 4 percent stake in Tim Hortons, or about 6.1 million shares. Scout Capital said it now owns some 8.4 million shares in the company.