# Small-potatoes investor telling big company what to do.



## NaeKid (Oct 17, 2008)

http://www.torontosun.com/2013/04/30/tim-hortons-investor-agitates-for-buybacks-new-strategy

*Tim Hortons investor agitates for buybacks, new strategy*



> NEW YORK - Canadian coffee-and-doughnut chain Tim Hortons Inc. is under pressure from one of its top investors to boost profitability through moves like buying back shares with borrowed money or paring back in the United States, according to documents seen by Reuters and two sources familiar with the matter on Tuesday.
> 
> Hedge fund Highfields Capital, which owns about 1.5 percent of the company, wants Tim Hortons to borrow $3.4 billion to buy back more than one-third of its outstanding shares at $59 apiece, the documents show.
> 
> ...


What I am reading here is that an investment firm who controls only 1.5% of the shares is trying to tell the company what to do with its money. If I was at the top of TimHortons, I would be telling Highfields to screw off ...


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## cowboyhermit (Nov 10, 2012)

That's how it reads to me as well


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## biobacon (Aug 20, 2012)

Something similar happened to CSX railroad two years ago. The Childrens Fund or what ever it was called owned like 30% or so and when it was all settled they got some board seats but not much else


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## backlash (Nov 11, 2008)

Like PETA buying stock in Sea World and then demanding they set Shamu free.

http://money.cnn.com/2013/04/24/news/companies/seaworld-peta/index.html


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## invision (Aug 14, 2012)

Seeing as it is the 10th largest investor to me is a little shocking that they are trying to make these demands... Ok, changing my original post... 

Depending upon when they purchased in Dec they could have bought in around $45-46 at the lowest... today their stock is sitting $56.32 - so they are up $10/share or an increase of $24M on their investment so far. They buyback makes sense - if they get the outstanding stocks down, it only increases their "value" and "strength" as a larger percentage owner... However, I think the BOD and CEO could force this out to a proxy vote or something... It almost sounds like they are going to try to split up the company for sell off...


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## NaeKid (Oct 17, 2008)

Ya, that company might have some money out there, but, as far as having a controlling interest in Tim Hortons, they do not have anything near being close enough to even having a chance to talk to the top-dogs of TimHortons ... 

Now, if they held 40% of the stocks, then the powers of Tim Hortons might consider listening to them.


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## Bobbb (Jan 7, 2012)

These kind of tactics don't rest on the merit of the position and instead focus on the effectiveness of the tactic.

There is no downside for this investor to make these demands, there's no penalty, there's no dip in price, nothing, nada. But there is an upside, they may convince management or enough other shareholders to go for the quick buck. In the schoolyard this is known as being a bully. Bullying works sometimes.


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## BillS (May 30, 2011)

I don't think it makes sense for a company to borrow money so they can buy back shares of stock. They'd end up taking on debt that wouldn't help the business. If they want to buy back their stock they should do it after the stock market crashes.


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