Wendy's International Inc. (WEN) Friday said it would sell up to 18 percent of its Tim Hortons doughnut chain in an initial public offering, sending its stock to an all-time high.

The No. 3 U.S. hamburger chain, which will also close some of its U.S. Wendy's restaurants and sell some real estate to franchisees, said it hopes to complete the IPO of 15 to 18 percent of Tim Hortons by the end of the 2006 first quarter.

Shares of Wendy's jumped $6.43, or 14.2 percent, to $51.70 on the New York Stock Exchange in Friday trading.

The strategic moves come as Wendy's faces increasing pressure from a major investor who has pushed for restructurw Wendy's to spin off to shareholders its remaining stake in the predominantly Canadian Tim Hortons (search) chain at a later time if Wendy's chooses, the company said. Tim Hortons has been a consistent growth driver for Wendy's profits, helped by a favorable Canadian exchange rate.

In a call with analysts, Wendy's Chief Executive Jack Schuessler said the company could make a full spinoff of Tim Hortons within 18 to 24 months.

Analysts had widely expected Wendy's to announce a major strategy change as the pressure from shareholders increased, and the stock has been rising in anticipation of such a move.

"Fundamentals have not been the driver of the investment story here, but rather strategic actions to create shareholder value," Larry Miller, analyst at Prudential Equity Group said in a research report following Thursday's earnings report.

Wendy's on Thursday reported a 1 percent drop in quarterly profit and lowered its earnings outlook for the year on sluggish restaurant sales and higher beef costs.

The company has been struggling to keep up with larger hamburger chains McDonald's Corp. (MCD) and Burger King Corp., which have both boosted sales and profits thanks to popular new products like meal-sized salads and premium chicken strips that Wendy's was once alone in offering.

Wendy's board also approved an additional $1 billion for share buybacks and raised the dividend by 25 percent to 68 cents per share annually.

Dublin, Ohio-based Wendy's also said it planned to sell more of its U.S. hamburger restaurants to franchisees, bringing the percentage of company-owned stores down to a range of 15 to 18 percent from 22 percent over the next two to three years.

The company also plans to close 40 to 60 underperforming restaurants and slow new store development under the Wendy's brand. Under the new plan, Wendy's intends to open just 30 to 40 new stores annually beginning next year, down from its average of 71.

The company operates 6,727 Wendy's restaurants and 2,755 Tim Hortons.

Wendy's stock is up 15.3 percent in the year-to-date, making it the second-best performer among the five restaurant chains included in the Standard & Poor's 500 restaurant index.

Only Darden Restaurants Inc., up 24.4 percent this year, has outpaced Wendy's share price performance. The broader S&P 500, meanwhile, has risen just 2.6 percent in 2005.