[chart45096]

CaptainForest,
Can you give me a little insight on this question.


Pick a company that had an initial public offering in the past 5-10
Years. Identify the IPO terms and answer the following questions:
· Did this company need to go public to in order to meet its
Financial needs?
· As an investor, would you have been willing to purchase the
Company's stock at the offering price? Why or why not?

[CaptainForest]

Look at the recent IPO of Tim Horton's Inc (came out last Friday).

Symbol THI and it trades on both the NYSE and TSE (Toronto Stock Exchange)




No, Tim Horton's didn't go public to meet its financial needs.

Wendy's Inc. owned them and decided they wanted to sell them off. So they sold off 15% of the stock last Friday and plan to sell the remaining 85% or so by the year end.

Tim Horton's management said that they plan to use the capital raised to pay back a loan they took out from Wendy's. But debt financing wasn't the main reason for the IPO.



As an investor, I would have loved to get some of the Tim Horton's stock at its IPO price. Here in Canada it was priced at $27 in its IPO, opened at $37 in the market, and now it's at $30.

If you were to ask a Canadian, one reason would be sentimental. Tim Horton was a hockey player for the Toronto Maple Leafs.

But, from a business stand point, it is a good investment. In the USA, McDonald's has 1 McDonald's for every 22,000 Americans. In Canada, Tim Horton's has a Tim Horton's for every 11,000 Canadians. They wish to get their per capita numbers down to 8,000.

They also wish to branch out more into the USA. They have some shops in the US right now (mainly in NY and FL).

The people against this stock would argue that Tim Horton's is a matured business and they can't really conquer much more of Canada since they already hold a monopoly. However, Tim Horton's says that is why they plan to branch out into the US.