Exclusive: Highfields Capital raises stake in Tim Hortons - source

NEW YORK Wed May 1, 2013 12:42pm EDT

A row of Tim Hortons coffee cups are lined up for customers at Penn Station in New York, July 13, 2009. REUTERS/Brendan McDermid

A row of Tim Hortons coffee cups are lined up for customers at Penn Station in New York, July 13, 2009.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Highfields Capital Management has increased its stake in Canadian coffee and doughnut chain Tim Hortons from 1.5 percent to around 4 percent this year, a source familiar with the situation told Reuters Wednesday.

A Highfields spokeswoman declined to comment. A Tim Hortons spokesman was not immediately available for comment.

Hedge fund Highfields Capital, which has a track record of bringing about change at other firms, wants Tim Hortons to boost returns through debt-funded share buybacks and a scaling back of U.S. expansion plans, according to documents seen by Reuters and two sources familiar with the matter.

Reuters first reported the news of Highfields' behind-the-scenes agitation Tuesday night.

(Reporting by Jessica Toonkel; Editing by Lisa Von Ahn)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article