Tim Hortons (THI, THI.TO) needs no introduction to the Canadian market. The little donut chain that could continues to sell double doubles.
Tim Horton's confirmed it was being acquired by Burger King (BKW) this week. Obviously, it must of been discussed in a Canadian Tim Horton's location as the management used the Drive-Thru to blow past resistance. Could it be BKW management was waiting in the drive thru lane for two weeks like the rest of the population? The THI stock started the move August 6th!
Some investors obviously think burgers and donuts are a great combination. Burger King (BKW) is also higher on the news. Interesting that it didn't start moving until Monday August 25. There was a brief surge on one particular day, but it closed back down in the previous trading range.
Apparently the media assembled were able to put the words "Tax Inversion" into the deal. That sent the investor community sky high!
With Tim's stock up 50% on the news as the transaction value puts a roughly $90 value to each share, there is lots to chew on. Does this mean Timbits will be available in China?
What does it say when the donuts and burger stocks in this deal are higher and the organic grocers like Whole Foods Market (WFM) have been going the other way?
Is all I know is the 200,000 new soccer, hockey and lacrosse players in Canada are all wearing Timbits shirts. The parents are either huddled in a rink or at a soccer pitch with their double double watching the timbits play. How the Burger King crown works into the picture is a marketer's job, but apparently investors think this merger is the new whopper. Does that mean we'll have 45 minute drive through line ups at Burger King now?
Good trading,
Greg Schnell, CMT
