As previously announced, Wendy’s (WEN) is filing for a $600M IPO of Canada’s beloved coffee and donut chain. The number of shares offered and the price range were not disclosed. The stock would be listed in both NYSE and TSE under the ticker symbol “THI”.
We do know that Wendy’s is planning to sell between 15%-18% of Tim Hortons in the IPO. It would mean that the value of the entire Tim Hortons stake is $3.3B-$4.0B (compared to the entire value of Wendy’s at $6B). Assuming revenues in the range of $1.5B in 2005, Tim’s would be valued between 2.2-2.6 times sales and very roughly 20 times trailing earnings. That sounds like a decent valuation and the IPO is likely to be in great demand here in Canada.
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26 responses so far ↓
1 dale // Dec 20, 2005 at 9:38 pm
When is tim hortons getting listed on the tsx?
thanks
dale
2 Canadian Capitalist // Dec 21, 2005 at 9:38 am
Dale:
According to Wendy’s Tim Hortons IPO would be complete by the end of 1Q-2006. The stock should start trading on the TSX around that time.
3 Jeff // Dec 22, 2005 at 9:07 am
Has anyone ever used rbcactiondirect for an ipo? I am interested in Tim Hortons when it is released?
4 sean // Dec 22, 2005 at 2:07 pm
does anyone know an exact date when the ipo will be released?
5 Canadian Capitalist // Dec 22, 2005 at 2:59 pm
Sean: As soon as Wendy’s puts out a press release, I’ll make a post. For now, all we know is that it will be towards the end of 1Q-2006.
Jeff: I’ve never bought IPOs as a matter of principle. I am still debating if I should make an exception for Tim’s. One thing is for sure: The issue will be in high demand in Canada.
6 john // Dec 28, 2005 at 11:25 am
I am wondering on who are the underwriters for this IPO? Can I purchase this stock through TD waterhouse?
7 Canadian Capitalist // Dec 28, 2005 at 4:44 pm
John: Goldman Sachs and RBC Dominion Securities are the lead underwriters.
8 DHou // Dec 28, 2005 at 11:51 pm
I have the same question as John.
So, we are not able to purchase IPO through TDwaterhouse??
9 Canadian Capitalist // Dec 29, 2005 at 8:56 pm
DHou: My guess is retail investors would find it difficult to get this IPO. We would know for sure in the Feb/March timeframe if TDW is offering this IPO.
10 Brett // Dec 30, 2005 at 5:59 pm
What will the price per share be at its IPO?
11 Domenic Rutigliano // Jan 2, 2006 at 1:04 pm
Could you please in form me if I can purchase this
IPO through bmoinvestorline and if not how else can
I do so.
Thank You
Domenic Rutigliano
12 Canadian Capitalist // Jan 2, 2006 at 4:18 pm
Domenic: I have no idea if this IPO would be available to retail investors. If any brokers read this blog, can you please let us know how retail investors can get this IPO? Wow, can’t believe the demand this puppy is going to have.
13 DHou // Jan 2, 2006 at 9:47 pm
I am holding back on this IPO thing now. I sort of wait to see how the market reflect after a couple month. From what i heard from other websites, the IPO price could range from 35-40 dollars.
14 Kulwant // Jan 4, 2006 at 6:49 pm
i am interested in buying tim hortons ipo, please send me the information of how to buy it and where to buy it, that is which exchanged and when it is coming out to public offering
15 Vary // Jan 4, 2006 at 7:10 pm
How much would the ipo of tim hortons be?
16 Nick // Jan 5, 2006 at 6:11 pm
It is going to be very hard to get any shares on the ipo becasue of the high demand. The big institutions will gobble up most of it first and whatever stock is left will go to their very wealthy clients. My advice is to “try” buying it within the first week or two after the ipo or even purchase Wendy’s stock which is on the NYSE. The demand is going to be so high for the stock the only way the price can go is up in the first few months.Its simple economics guys. Get in and get out with some nice gains.
17 Canadian Capitalist // Jan 6, 2006 at 6:37 am
Nick: Thanks for your comments. I think I am going to sit this one out, because it sounds like it will be driven only by demand (too high) and not by actual fundamentals. I will wait for the stock to settle and in any case, looks like Wendy’s will spin-off / sell the rest within two years.
18 Rob // Jan 6, 2006 at 12:41 pm
To answer your questions on whether you as an investor can purchase the Tims Securities through a Discount Brokerage / Online Firm (TD Investorline, BMO Investorline, Scotia Direct ect…), 99.9% NO. The whole placement will be eaten up by institutions (full service firms). 2/3 or the placement will go to institutions in the US, 1/3 will go to canadian firms. RBC is the lead underwriter in Canada, so if you have a full service brokerage account with them, your chances are slightly better. Most of my clients have expressed interest, and I will only be able to offer to less than a fifth of them. Best option is to purchase on the open market the first week if the price doesnt deviate to far away from the offer price.
Happy Investing.
19 mark // Jan 14, 2006 at 12:42 pm
What is the effect of buying Wendy’s stock now… will we automatically be issued with Tim Hortons stock as a result? If so on what basis??
20 Andy // Jan 16, 2006 at 2:30 pm
Tim Hortons IPO may be a hard to get
Jan. 15, 2006. 01:40 PM
CANADIAN PRESS
Canadians thirsting for a taste of the upcoming Tim Hortons initial public offering could have difficulty getting their paws on the much-vaunted trust units — at least while they are still piping hot.
U.S. investment bank Goldman Sachs is managing the deal, along with RBC Capital Markets, and observers say American investors are poised to get the first crack at the IPO which is brewing interest on both sides of the border.
“In the initial go around, I would imagine that the majority of the shares will end up in the hands of U.S. investors simply because the U.S. dealer is the lead underwriter on this,” said Fred Ketchen, manager of equity trading at Scotia Capital.
“It would make it just so much easier, you know, if we could drive up to the takeout window and have a double-double and a hundred shares.”
Affectionately dubbed “Tims” by java junkies across Canada, the iconic coffee shops are the country’s largest fast-food chain, based on sales and number of restaurants.
Its American parent, Wendy’s International Inc. (NYSE: WEN), has now decided to bump up the timeline for a complete multi-billion-dollar spinoff of the storied coffee and doughnut chain — namesake of former Toronto Maple Leafs’ defenceman Tim Horton.
Wendy’s plans a late March initial public offering of an 18 per cent chunk of Tim Hortons on the Toronto and New York stock exchanges. That first tranche will be worth an estimated $600 million US, but the planned IPO values the entire chain at about $4 billion US.
Wendy’s then plans to spin off the rest of Tim Hortons within nine to 18 months by giving its shareholders new stock that represents the remaining stake in the division.
Industry observers say the Tim Hortons shares could be worth between $29 and $36 each.
“This is going to be a hot issue,” Ketchen said of the IPO. “Chances are that it will be well over-subscribed.”
That means Canadians who are not already active traders could be out of luck — at least initially.
Experts say units will eventually filter down to average Canadians, but likely at a higher price, and only after being widely circulated on financial markets.
Here’s why: In general, investment banks that underwrite IPOs each get a certain portion of the shares and allot them to their clients, both individual and institutional buyers.
Some of those investors will be Canadians, but ordinary folks looking to buy units on the TSX down the road need to open an account with a broker.
There is, however, another way for Joe Canuck to get in on the action. “You could go and buy some Wendy’s shares (on the New York Stock Exchange),” Ketchen said.
That would allow Canadian investors to eventually access Tim Hortons shares when Wendy’s does the special Tim Hortons stock dividend during the second part of the spinoff.
“The only difficulty with that is that there are those about who are suggesting that at its current price ($57 US) . . . perhaps the stock is a little overpriced,” Ketchen said. “Is it worth buying Wendy’s at this price to get a spinoff of Tim Hortons?”
That’s because Tim Hortons has been largely credited for propping up its U.S. parent.
Earlier this month, Wendy’s said preliminary same-store sales at Tim Hortons for the fourth-quarter, ended Jan. 1, were up 5.8 per cent at restaurants in Canada and 6.7 per cent in the United States.
Wendy’s-only restaurant sales, by contrast, decreased 2.9 per cent at U.S. company stores and 1.9 per cent at U.S. franchised restaurants.
Tim Hortons, based in Oakville, Ont., has about 2,800 restaurants but does the lionshare of its business in Canada. American burger giant Wendy’s, based in Dublin, Ohio, scooped up Tim Hortons in 1995 but Canadians continue to fondly regard it as a slice of Canadiana.
“I think that Canadians are much more appreciative of Tim Hortons than the U.S.,” commented John Kinsey, a portfolio manager with Caldwell Securities.
“What I would envisage is a gradual shift in ownership from the U.S. to Canada.”
21 Mike // Jan 28, 2006 at 10:43 am
So I guess the bottom line is to wait for about 1 -2 weeks after the IPO to get in the game of buying THI stock? Will the stock be valued more on the NYSE compared to the TSX?? Also, do any professionals out there see this stock going 10%, 20% or higher 6 months to 1 year after the IPO? Lastly, if you do purchase Wendy’s stock, how much of the THI stock will you be entitled to after the second IPO (is it share per share)? I am looking into throwing some serious money on this stock. Anybody else?
22 Ed // Mar 7, 2006 at 12:41 pm
Now that the price is known what are the odds that I would be able to get Tim Horton’s stock on the open market close to what the initial offering is?
Even thought the underwriter is RBC will I sitll be able to buy the stock through TD Waterhouse?
23 Tim Hortons » Dan Tappin: Tim Hortons // Apr 17, 2006 at 10:52 pm
[...] Canadian Capitalist ” Tim Hortons IPO … We do know that Wendy’s is planning to sell between 15%-18% of Tim Hortons in the IPO … the value of the entire Tim Hortons stake is $3.3B-$4.0B (compared … [...]
24 Tim Hortons » Canadian Capitalist ” Tim Hortons IPO // Apr 25, 2006 at 3:50 pm
[...] Canadian Capitalist ” Tim Hortons IPO … We do know that Wendy’s is planning to sell between 15%-18% of Tim Hortons in the IPO … the value of the entire Tim Hortons stake is $3.3B-$4.0B (compared … [...]
25 sarabjit sandhu // Oct 27, 2007 at 2:11 pm
i am interested in buying tim hortons ipo, please send me the information of how to buy it and where to buy it, that is which exchanged and when it is coming out to public offering
26 chuck // Feb 19, 2008 at 1:35 pm
hey man whats up
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