August 26, 2014 / 11:30 AM / 5 years ago

TSX advances after Tim Hortons climbs on deal news

TORONTO (Reuters) - Canada’s main stock index rose on Tuesday as shares of Tim Hortons Inc climbed after the coffee chain said it planned to merge with Burger King Worldwide Inc in a C$12.64 billion ($11.53 billion) deal.

A man walks past an old Toronto Stock Exchange (TSX) sign in Toronto, June 23, 2014. REUTERS/Mark Blinch

The companies said the cash-and-stock agreement would create the world’s third-largest fast-food restaurant group, with roughly $23 billion in combined annual sales. Tim Hortons shares jumped 8.1 percent to a multi-year high.

The Toronto market received further support from shares of energy companies, which benefited from gains in the price of U.S. crude oil.

The benchmark TSX has climbed nearly 15 percent this year and has outperformed the S&P 500.

“The mood continues to be quite upbeat,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

“That said, we’re getting to pretty elevated levels,” he added. “If investors get a little skittish and take some money off the table, it wouldn’t really be a tremendous surprise.”

The Toronto Stock Exchange’s S&P/TSX composite index closed up 20.47 points, or 0.13 percent, at 15,619.21. Seven of the 10 main sectors on the index were higher.

Shares of energy producers advanced 0.5 percent, with Canadian Natural Resources Ltd jumping 1.2 percent to C$47.16.

Financials, the index’s most heavily weighted sector, slipped after two of Canada’s major banks reported results.

Bank of Montreal gained 0.4 percent, to C$82.16, after the company reported a stronger-than-expected third-quarter profit, helped by gains at its Canadian and U.S. personal and commercial banking units and higher revenue at its capital markets arm.

But Bank of Nova Scotia gave back 2.4 percent to C$72.45 after the lender reported quarterly results.

Tim Hortons was up at C$88.71 and was one of the most heavily traded stocks on the exchange. In the previous session, the stock shot up more than 19 percent.

Editing by Grant McCool and Jonathan Oatis

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