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Fast Food Shares Skyrocket; Traders Anticipate Merger-friendly Taxes

Aug 26 2014

Tim Hortons Coffee & Bake Shop

Tim Hortons Coffee & Bake Shop (Photo credit: Wikipedia)

Tim Horton's and Burger King have seen a drastic increase since the fast food giants have begun joining forces by means of a merger. Such a move could assist Tim Horton's in increasing its odds of successful future United States growth.

While the actual dollar value of such a deal is unknown, it is reported that both companies experienced a surge in stocks, showing the Burger King company and associated franchises up more than 16% to over $31 dollars on the NYSE shares. Tim Horton's took a noticeable leap up 19%, balancing out at more than $82 on the stock market in Toronto, Canada. This was an increase of $13.52.

It has been validated from both sides that the companies are negotiating, with Tim Horton's, who's headquarters is located in Oakville, Ontario, and Burger King, which reigns from Miami, Florida, that both companies would continue to function as individual entities regardless of any merger discussions or end result which potentially takes place.

Market analyst Colin Cieszynski, is quoted as saying the response of the stock points to general public being strongly in favor of the merger, even going so far as to state that the companies believe the move is a strategic business venture. It has been noted by those involved in the proposal that stocks from two potentially merging companies will typically not rise at the same time without a very good future outlook for both companies and their stocks.

Those involved in the final decisions are taking two major points into consideration: What level of premium is the Burger King conglomerate considering in regard to payment, and are there others in the business mainstream who are considering the same scenarios and planning actions?

Natives of Canada may feel a certain amount of loyalty to Tim Horton's and the coffee they serve, regardless of the fact that they stem from a United States based chain. Being a 2006 takeoff from Wendy's does not matter. Tim Horton's remains the top dog in Canada,even though it has fought hard to acquire the recognition it desires from the United States' consumer. Keep in mind Starbucks and McDonald's, and the struggle of Horton's is easily explained.

Regardless of the merger discussions and potential plans being made by both companies, the money that would be made through the merger would be highly beneficial for investing in dividends or businesses and buybacks. The potential for success and growth for both corporations is far reaching, and would prove lucrative for all investors involved.

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