Tim Hortons Inc. has announced that its board of directors has approved resumption of the previously announced share repurchase program, beginning in the fourth quarter. The company currently expects to spend up to $150 million during the remainder of the program until it terminates on March 1, 2010.
The company announced in May its decision to defer further purchases in its share repurchase program, pending a change in corporate structure, which was subject to shareholder approval at that time. As a result of the subsequent completion of the reorganization as a Canadian public company, the board has approved resumption of the previously announced program.
"Our decision to resume our share repurchase program reflects in part efficiencies arising from our new corporate structure as well as our continued confidence in our strong cash flow generation capabilities," said Cynthia Devine, chief financial officer.
Under terms of the existing program, the company is authorized to purchase up to $200 million in common shares, not to exceed the regulatory maximum of 9 million shares or 5 percent of the outstanding common shares. Prior to the decision to defer purchases under the program, the company spent $16.7 million to repurchase approximately 0.6 million common shares.
Share purchases will be made through a combination of a 10b5-1, or automatic trading program, and through management's discretion considering regulatory requirements, and market, cost and other considerations. Repurchases will be made by Tim Hortons on either the Toronto Stock Exchange or the New York Stock Exchange.
There can be no assurance as to the precise number of shares that will be repurchased under the share repurchase program, or the aggregate dollar amount of the shares purchased. Tim Hortons may discontinue purchases at any time, subject to compliance with applicable regulatory requirements. Shares purchased pursuant to the share repurchase program will be cancelled.
