Shares of Canadian coffee and doughnut chain Tim Hortons Inc. soared Friday in their trading debut on the New York Stock Exchange, the Associated Press reports.
The shares, trading under the symbol “THI,” rose to $29.72 in afternoon trading, up 28.3 percent from its initial public offering price of $23.16 per share set Thursday night. They traded as high as $33 earlier in the session.
“It’s a day we’ve all been looking forward to,” Don Schroeder, Tim Hortons’ executive vice president of administration, told the AP from New York, where he helped ring the bell to start trading on the stock exchange and bought the first 100 shares for $31.95 apiece.
The company is being spun off by corporate parent Wendy’s International Inc., based in the Columbus suburb of Dublin. Tim Hortons sold 29 million shares, netting $671.6 million for a 15 percent stake in the company.
“It’s a bittersweet moment for everybody because we have such a wonderful relationship,” Schroeder said. “It’s like a child leaving home.”
Wendy’s, which bought Tim Hortons in 1995 in a deal worth $620 million, will continue to own about 160 million shares of the Tim Hortons shares, according to a filing this month with the
Securities and Exchange Commission. The No. 3 burger chain could reduce its stake to about 83 percent if the IPO’s underwriters fully exercise an overallotment.
Wendy’s has said it plans to spin off its remaining stake to its shareholders by the end of the year. Most of the money will be used to pay off debt Tim Hortons owes Wendy’s.
Tim Hortons, the largest quick service restaurant chain in Canada with 2,600 stores, was founded by Tim Horton and Ron Joyce. There are about 300 stores in the United States, mostly in Ohio, Michigan, New York, Rhode Island and Connecticut.
Tim Hortons has made steady sales gains during a sluggish year for Wendy’s. Tim Hortons recorded revenues of $1.2 billion last year, according to Wendy’s latest earnings report.
Schroeder said the company wants to have about 500 stores in the U.S. by 2008 and 2,600 in Canada by 2013.
Wendy’s shares fell $2, or 3.1 percent, to $63.01 in afternoon trading on the New York Stock Exchange, after reaching a record high at $66.35 earlier in the day. The stock’s low in the past year has been $38.04.
Tim Hortons is one of several restaurant chains that has sold or plans to sell shares to the public.
In a January offering of Chipotle Mexican Grill, owned by McDonald’s Corp., the price of nearly 7.9 million shares doubled in their first day of trading to close at $44.
Morton’s Restaurant Group Inc., operator of the high-end steakhouse chain, went public in February, and Burger King Holdings Inc. is planning an IPO for the No. 2 U.S. hamburger chain.