Scout Capital Discloses 6% Stake In Tim Hortons; Company Faces Two Large Activists

Scout Capital Discloses 6% Stake In Tim Hortons; Company Faces Two Large Activists

Scout Capital Management, a hedge fund co-founded by James Crichton and James Weiss increased its stockholdings in coffee chain, Tim Hortons Inc (NYSE:THI) (TSE:THI) based on its latest 13D filing with the Securities and Exchange Commission (SEC).

Scout Capital Discloses 6% Stake In Tim Hortons; Company Faces Two Large Activists

The hedge fund acquired additional 6, 139,996 shares of Tim Hortons Inc (NYSE:THI) (TSE:THI) bringing its total stake in the company to 8,400,000 shares of 5.5 percent, up from a 1.5 percent stake reported in March. The coffee chain seemed to be facing another pressure as Scout Capital indicated that it would continue to engage in discussions with the senior management of the company regarding its optimal capital structure, capital expenditures, timing & magnitude of share repurchases, management compensation metrics, technology investments and other issues.

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In addition, Scout Capital wrote in its filing that it may have engaged and in the future would engage in talks with the management, board of directors, fellow shareholders and other relevant parties about the assets, business, financial condition, governance, management, operations, and strategy and prospective plans of the company.

Scout Capital previously increased its stake in DineEquity Inc (NYSE:DIN) to 6.62 percent stake or 1, 280, 231 shares.

Scout Capital Joins Highfields

Meanwhile, early in May, Highfields Capital, another shareholder of Tim Hortons Inc Tim Hortons Inc (NYSE:THI) (TSE:THI) demanded the company to return capital to shareholders through shares buyback. The hedge fund said the company could spin off or sell its distribution business, create a real investment trust to house its property assets, and appoint new directors with broad financial experience.

During the latter of May, Tim Hortons Inc Tim Hortons Inc (NYSE:THI) (TSE:THI) announced that it will buy back 200,000 common shares under its share repurchase program.  In May 14, the company repurchased 1.27 million common shares.

The eight incumbent directors of Tim Hortons Inc Tim Hortons Inc (NYSE:THI) (TSE:THI) were also re-elected to the board and will serve until its next annual shareholders meeting. Marc Caira was also named as a substitute nominee after one of its directors passed away in April.  The board of directors of the coffee chain also approved the payment of dividend of $0.26 per share. The company’s dividend was declared and paid in Canadian dollar for all Canadian shareholders, and would be converted in U.S. dollars on existing exchange rates at the time of its conversion for registered shareholders and by Clearing and Depository Services Inc. for beneficial shareholders.

Highfields Capital owns approximately 6.1 million shares or 4 percent stake in Tim Hortons Inc Tim Hortons Inc (NYSE:THI) (TSE:THI).

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