Tuesday, March 21, 2006

Tim Horton's Carveout

This is a text book quality example of an IPO. Not only is a well known company, it has altered its price range, offered its investment bankers a Green Shoe Option, but the parent Wendy's is only carving out a portion of the firm and then plans on spinning off the rest later.

Globeandmail.com : Tim Hortons boosts IPO price:
"Tim Hortons Inc. is boosting the price of its stock and granting its underwriters the option to buy more shares when the company goes public this week"
"It would still leave Wendy's with most of Tim Hortons' outstanding shares, but the fast food chain announced earlier this month it would spin off its remaining shares by the end of the year."
Wow, they don't make any better examples than that!

1 comment:

Anonymous said...

Hi - I don't understand the rationale behind what you are trying to say regarding a text book example with the THI IPO? Aren't most of the shares in an IPO released all at one time as oppossed to this structure of releasing some now and some later? I believe the share realease structure that THI choose will hurt the share price in 2006. I know they choose this method for tax reasons but a lump offering of all shares would have made this stock rally much harder in my opinion. As the remaining shares are released the price will only become more diluted. Don't get me wrong, I don't believe this is a growth stock, but the chosen strcuture of this IPO will only hurt the share price in 2006. COuld you please elaborate on your "text book" comments with some examples?