OAKVILLE, Ont. – Tim Hortons Inc. (TSX:THI) says it has agreed to buy back up to 1.27 million of its common shares in stages from an unidentified seller by the end of this month.
The cost of the stock buyback wasn’t disclosed by the restaurant company but its shares closed Monday at $55.65 on the Toronto Stock Exchange, putting the pricetag for a maximum purchase at about $70 million.
It is a common practice from companies to use some of their earnings to repurchase and cancel some publicly traded stock — a move that tends to support earnings per share because overall profits are spread over fewer shares.
Tim Hortons says that the stock to be repurchased under the deal announced Tuesday will count towards a total of up to $250 million that it’s authorized to spend to repurchase as many as 15.2 million shares by next February.