Tim Hortons Post Gains on Pressure From U.S. Hedge Fund

Tim Hortons Inc. (THI), the biggest donut and coffee chain in Canada, gained the most in 14 months on a report that the company is being pressured by an activist hedge fund to buy back stock.

Tim Hortons, based in Oakville, Ontario, gained 4 percent to C$56.76 at 12:16 p.m. in Toronto, the most since Feb. 23 last year. It earlier rose 5.9 percent, the most since August 2011.

Highfields Capital Management LP, which which owns 1.6 percent of Tim Hortons, is pressuring the company to borrow $3.4 billion to buy back a third of its stock at $59 a share, Reuters reported. It’s also calling for the company to spin off its retail assets into a real estate investment trust, as Loblaw Cos., a Canadian grocer, is planning this year.

Joseph Mazzella, general counsel at Boston-based Highfields, didn’t immediately return a call seeking comment. Alexandra Cygal, a spokeswoman for Tim Hortons, didn’t return a message seeking comment.

To contact the reporter on this story: Katia Dmitrieva in Toronto at edmitrieva1@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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