Hedge fund faces challenge in Tim Hortons shakeup bid

By Euan Rocha and Jessica Toonkel

TORONTO/NEW YORK (Reuters) - Highfields Capital, a U.S. hedge fund agitating for change at Tim Hortons Inc, may have a hard time convincing institutional investors that the chain that says it sells eight out of every 10 cups of coffee in Canada needs a wake-up call.

The Boston-based activist investor, with an about 4 percent stake in the company, wants Tim Hortons to boost shareholder returns by taking on new debt to buy back its stock.

It is also pushing Tim Hortons to scale back its U.S. expansion and focus more closely on its thriving Canadian business. The fund, which also outlined a second tier list of demands, wants Tims to spin off or sell its distribution business, create a real estate investment trust to house its property assets and bring in new directors with more financial experience.

On Wednesday, Highfields confirmed an earlier exclusive Reuters report about the proposals, and said it currently owns 6.1 million shares of Tim Hortons. The fund said the company is studying its proposals and it looks forward to continuing a dialogue with Tim Hortons.

But the proposals may not be so easy to sell to long-term investors, according to some money managers and investors.

"This business ain't broke and needs no fixin'," said Barry Schwartz, a portfolio manager at Baskin Financial, which owns roughly 130,000 shares in Tim Hortons, according to Thomson Reuters data.

"The company is shareholder-friendly and has rewarded long-term investors with rising dividends and share buybacks, plus the stock performance since the IPO has been terrific," he said.

The shares have more than doubled in value since an IPO in March 2006, when Wendy's Co spun off Tim Hortons.

The proposals from Highfields represent the latest attempt by a U.S. hedge fund to shake up a Canadian company.

Last year, Bill Ackman's Pershing Square won big change at Canadian Pacific Railway after a bitter public battle. Earlier this year, fertilizer company Agrium Inc fended off an attempt by its biggest shareholder, U.S. hedge fund Jana Partners LLC, to break up the company and defeated Jana's slate in a hard fought proxy battle.

SIMILAR DEMANDS

Highfields has made demands that are similar to those put forth by Jana in its fight at Agrium. The fund wanted Agrium to spin off or sell its retail arm and add people with more experience in retail to its board.

But David Baskin, the head of Baskin Financial, sees big differences between the situation facing Highfields and Ackman's successful proxy fight at CP Rail, which resulted in a sweep for his slate.

"Canadian Pacific had a tired board with weak management, chronic underperformance and restive shareholders," he said. "None of that applies to Tim Hortons, which I think is still widely liked by institutional holders."

Tim Hortons' stock has rose about 60 percent over the last five years, while the Toronto Stock Exchange's S&P/TSX composite index has fallen roughly 13 percent over the period.

That said, shares of some of Tim Hortons' U.S.-based rivals have outpaced the Canadian chain.

McDonald's Corp shares have climbed about 70 percent over the same period, while Starbucks Corp has nearly quadrupled in value.

"Tims' performance has been somewhere between good and very good, given economic conditions in a hyper-competitive sector. So I would guess it will be hard for these guys to get traction but maybe the stock will respond anyway," Baskin said.

The shares closed up 4 percent at $56.32 on the New York Stock Exchange on Wednesday, while Tims' Toronto-listed shares rose by a similar margin to C$56.77.

TOUGH LANDSCAPE

Despite its growth and strong performance, analysts concede that the Canadian coffee chain faces strong headwinds.

Analysts have questioned whether the brand - which arguably trails only hockey and the maple leaf as a symbol of Canada - can continue to grow at home.

Tim Hortons - with some 3,400 company-owned and franchised stores in Canada - has virtually saturated the market. At the same time, U.S. rivals such as McDonald's and Starbucks have also stepped up their presence north of the border, limiting Tim's organic growth potential.

"We don't view either player as an immediate threat to Tim Hortons' scale and strong brand perception," said R.J. Hottovy an analyst at Morningstar. "But we believe competition will become increasingly fierce in the decade to come, leading to more aggressive price wars."

Highfields may have some success in building a case for spinning off Tim Hortons' real estate assets into a new publicly traded REIT - a path that other players have taken. Canada's top food retailer, Loblaw Cos, said earlier on Wednesday that it plans to complete the initial public offering of its REIT in early July.

"Canada is a more conducive market than the U.S. right now, when it comes to REIT conversions," said Hottovy, noting that a company spinning off the assets can still maintain a controlling interest in a REIT in Canada.

Tim Hortons in the past has panned the REIT idea, as it owns only 20 percent of its retail real estate assets. The company declined to comment beyond saying it remains focused on creating shareholder value.

"(We) always welcome constructive dialogue with our shareholders. We don't comment on specific conversations," said Tim Hortons spokesman Scott Bonikowsky.

BUYBACK PLAN

Highfields also faces a tough task convincing long-term investors that a debt-funded share buyback is a sound plan.

John Goldsmith, deputy head of equities at Montrusco Bolton, a firm that owns nearly 260,000 Tim Hortons shares, questions whether the strategy makes sense over the long term, even though low interest rates have made it more attractive for activists to push companies to take on cheap debt to fund buybacks.

"This might temporarily add value per share mathematically, the question is does this create sustainable value add or simply a one-time pop?" he said.

RBC Capital Markets analyst Irene Nattel said layering on $3.4 billion in debt to fund a buyback might add to earnings. But it puts Tim's investment-grade rating at risk, potentially raising borrowing costs and moderating any earnings per share gains for the company.

Tim Hortons is being advised by Citigroup Inc and RBC Capital Markets - both banks declined to comment.

(Additional reporting by Solarina Ho and Allison Martell; Editing by Frank McGurty, Bernard Orr)

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Mexican president faces teachers' revolt

ATLIACA, Mexico (AP) — Easter vacation was over, but there wasn't a teacher in sight at the boarding school for indigenous children on the edge of this sunbaked southern Mexico hill town.

A 37-year-old cook who hadn't finished high school sat between two little girls on a cement stoop outside the kitchen, peering at their dog-eared notebooks as they struggled with the alphabet and basic multiplication.

"I've got the children here. If there aren't any classes while they're here, I have to teach them," said the cook, who shared only her first name, Gudelia, for fear of retaliation from striking teachers.

A short drive away, teachers marched by the thousands through the streets of the state capital, some masked and brandishing metal bars and sticks in an escalating showdown over education reform that's become a key test of President Enrique Pena Nieto's sweeping project to reform Mexico's most dysfunctional institutions.

The fight is dominating headlines in Mexico and freezing progress on a national education reform that Pena Nieto hoped would build momentum toward more controversial changes. Those include opening the state-owned oil company to foreign and private investment and broadening Mexico's tax base, potentially with the first-ever sales tax on food and medicine.

Pena Nieto's first major legislative victory after taking office in December was a constitutional amendment eliminating Mexico's decades-old practice of buying and selling teaching jobs, and replacing it with a standardized national teaching test. That's heresy to a radical splinter union of elementary and high-school teachers in Guerrero, one of the country's poorest and worst-educated states. The teachers claim the test is a plot to fire them in mass as a step toward privatizing education, although there is little evidence the government plans that.

Reform advocates say the dissidents simply fear losing control over the state education system and the income it provides, despite the need to reform a system that eats up more of the budget and produces worse results than virtually any other in the world's largest economies.

The 20,000-member group walked out more than a month ago, turning hundreds of thousands of children out of class. Then it launched an increasingly disruptive string of protests.

On Wednesday, the protesters won support from a wing of the armed vigilante groups that have multiplied across poor Mexican states in recent months. On Thursday, they blocked the main highway from Mexico City to Acapulco for at least the third time, backing up traffic for hours. On Friday, they shut down entrances to some of the biggest stores in the state capital.

After returning Mexico's former ruling party to power, Pena Nieto won international acclaim in his first five months by taking on some of the country's most powerful people. He jailed the head of the far-larger national teacher's union when she threatened to fight school reform. Then his push to open the telecommunications business provoked a multi-billion-dollar drop in the stock of the market-dominating phone companies owned by the world's richest man.

Now the president finds himself facing unexpectedly tough resistance from rural teachers in straw hats and plastic sandals in his first direct conflict with the Mexican far left, a diverse and fractious group encompassing student activists, militant unions, anarchists and the remnants of indigenous guerrilla groups. The dissident teachers and their growing list of allies say that more protests are planned for other poor and heavily indigenous states starting Monday.

"If it spreads into other states then it's a real problem. It means the government can't just plan on pushing the agenda from the top," said Federico Estevez, a political science professor at the Autonomous Technological Institute of Mexico.

The conflict is fueled by the importance of teaching jobs for the poor mountain and coastal villages where the dissident union is strongest. Teaching jobs in Guerrero with lifelong job security, benefits and pension pay about $495 and $1,650 a month, depending on qualifications and tenure, well above average in rural areas, according to teachers and outside experts. They said the price to get such as job can cost as much as $20,000, usually going to the departing teacher, with cuts for union and state officials.

State education officials declined repeated requests for comment.

Only 47 percent of Mexican children graduate from the equivalent of high school, even though the country spends as greater share of its budget on education than any other member of the 34-nation Organization for Economic Cooperation and Development except New Zealand.

Teachers at schools that in Guerrero this week told The Associated Press that they agreed for the need for reform, but pointed to a host of problems unrelated to teacher qualifications, including class sizes of up to 40 students per class, curricula that promote rote learning over engagement and a lack of state money for maintenance that forces parents to contribute a mandatory $25 fee so that schools can pay for costs like classroom fans and fixing sports fields.

As he marched with the dissident union on Wednesday, Brutilio Tapia Cande, a 26-year veteran teacher from a town deep in the Guerrero highlands, denied that jobs were sold but said he saw nothing wrong with the tradition of passing a steady lifelong income on to his children.

"It's a source of income for the highlands and for the whole state," he said. "The teachers are the ones who feed the highlands.

"If a teacher retires his place automatically is inherited by his son," Tapia continued. "But now what the government wants is just to fire and cut the budget."

But there are signs of waning sympathies even among the residents of the towns that depend so heavily on teachers' income.

One is Ines Sanchez, whose 8-year-old Guadalupe chased her friends and a few stray sheep among the closed classrooms of the Lazaro Cardenas Primary School in Atliaca this week as her teachers protested in the capital.

"We parents feel bad because the children aren't going to school, they aren't learning anything," Sanchez said. "When the time comes to go back to school they don't want to, because they're used to just running around playing."

So far there's no resolution in sight.

The government has deployed hundreds of unarmed federal police to unblock the highway, a goal police commanders have accomplished through negotiation and one clash that left a handful on both sides injured. Pena Nieto has said little about the conflict, but there is increasingly tough talk coming from his top aides.

"We're not going to respond to the threats that they've been making," Interior Secretary Miguel Angel Osorio Chong, Mexico's top law-enforcement official, said Friday. "We believe there are limits and the limit is the rule of law."

Gonzalo Juarez Ocampo, the most visible leader of the State Coordinator of Guerrero Education Workers, also issued an unsubtle warning of potential violence on Wednesday when he announced the union alliance with the 1,200-member vigilante group known as the Regional Coordinator of Community Authorities. That had ominous overtones in a country where teacher's protests exploded into clashes with police in 2006, shutting down the city of Oaxaca for five months and leaving at least a dozen dead.

The new movement, Juarez said, is "peaceful, a citizen's movement, a legal movement."

"We hope that the government understands that, and we don't have to move to a different phase," he said.

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Michael Weissenstein on Twitter: http://Twitter.com/mweissenstein

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Jose Antonio Rivera contributed to this report.

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C. African Republic rebel leader faces challenges

DAKAR, Senegal (AP) — Michel Djotodia showed up for peace talks a few months ago in camouflage and a turban as the face of Central African Republic's rebel movement. Now he has traded those fatigues for a suit as the country's new self-declared leader after overthrowing the president of a decade.

Djotodia, whose diverse resume includes studying in the former Soviet Union and working as a consul in Sudan's region of Darfur, initially signed on in January to serve as the defense minister in a unity government with his longtime nemesis, then President Francois Bozize.

But that power-sharing deal quickly fell apart. Only two months later, Djotodia's forces invaded the capital, and he declared himself president of the impoverished but mineral-rich country for at least the next three years.

Although Djotodia (pronounced joe-toe-DEE-uh) emerged as the dominant leader of the alliance of rag-tag fighters known as Seleka, which means alliance in the local Sango language, some of his colleagues are already saying they never intended for him to single-handedly lead the country after Bozize's ouster.

"We didn't battle to get rid of one dictator only to have another," says Nelson N'Djadder, a Paris-based rebel leader who is now threatening to fight Djotodia for leadership of a nation long plagued by coups and rebellions.

Djotodia, a 60-something longtime rebel, was once a civil servant under Bozize's predecessor and worked at the Central African Republic's consulate in Nyala, located in Sudan's South Darfur state. Recent developments come as little surprise to some observers.

"He has single-mindedly always wanted to be president of Central African Republic. He has been a tremendously ambitious man," said Alex Vines, head of the Africa program at Chatham House, a London-based institute on international affairs.

"In the end he had one vision, which was to take power and he has done that unconstitutionally now," Vines added.

Among a wide field of potential rebel leaders, he managed to position himself front and center, said Louisa Lombard, a postdoctoral fellow at the University of California, Berkeley who has been traveling to Central African Republic for the past 10 years for research.

"I think he's mostly been successful through his diplomacy and negotiating alliances with different people and getting them on his side," she said. "It's a combination of being in the right place and having the right ambitions."

Djotodia hails from the country's northeastern Vakaga area, the poorest region of one of the world's most deeply impoverished countries. Analysts say he married and had children while living in the Soviet Union, and speaks fluent Russian and French.

By 2006 he had helped form the Union of Democratic Forces for Unity, known by its French acronym UFDR. His rebels sparked alarm when they seized the capitals of two northern provinces that year.

While the UFDR at the time "claimed to be fighting for greater government investment in the neglected northeast," its leaders seemed more interested in getting well-paying jobs within Bozize's government as part of a cease-fire agreement, according to a report by the International Crisis Group.

Djotodia later fled into exile in Benin in 2006 along with his colleague Abakar Saboune, where they were ultimately arrested and thrown into prison on international arrest warrants. He was released in 2008 at the request of the Central African Republic government, according to human rights groups.

It's not exactly clear where he was or what he was doing immediately after his release in Benin but after returning home, Djotodia spearheaded a rebel alliance that made partners out of sworn enemies.

His return to Central African Republic appears to have been a key factor in sparking the Seleka rebellion in December, say analysts and observers.

In an interview with Jeune Afrique magazine published the same week Bozize was overthrown, Bozize said he suspected foreign involvement in the rebellion.

"Six months before the launching of this rebellion, I sent a delegation to meet with (Djotodia) in his home city of Gordil," Bozize recalled. "He declared that he was in favor of peace and respecting the demobilization agreements. So I was quite surprised to see him launch this regrettable venture. Was he activated by external forces? It's probable."

Djotodia is believed to have cultivated ties with Chadian rebels while working in Sudan a decade ago. Those possible ties to elements in other countries and the shaky alliance between other fighters in the Seleka coalition could prove challenging, said Berkeley analyst Lombard: "I think it's likely that we'll see some struggles for control and power in the weeks to come."

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Associated Press writer Angela Charlton in Paris contributed to this report.

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Colombia's ex-pres faces blowback over peace talks

BOGOTA, Colombia (AP) — Alvaro Uribe did more as president than any Colombian leader to weaken the South American nation's main leftist rebel group and he has been among the most vocal opponents of peace talks with the insurgents. Now, he's finding that his strident opposition to the negotiations is bringing him some unsought attention.

Uribe's high-profile role in what has become a fierce battle for this Andean nation's future has drawn new scrutiny to his ties to provincial politicians, military officers and landowners accused of backing illegal right-wing death squads that killed thousands of noncombatants in Colombia's decades-old dirty war.

Formal talks to end the half-century-old conflict with the Revolutionary Armed Forces of Colombia, or FARC, began in November in Cuba, and a seventh round has just begun.

Uribe has been relentlessly attacking his successor, Juan Manuel Santos, the instigator and champion of the negotiations. Uribe insists Santos, who is up for re-election in May 2014 but has not declared his candidacy, is leading the country to ruin.

Any peace pact reached at the Havana talks with the FARC, Latin America's oldest and most potent rebel army, would only rekindle instability in the conflict-scarred nation Uribe led from 2002-2010, the former president maintains. Uribe vehemently opposes Santos' plan to pardon and grant amnesty to FARC commanders so they can participate in political life. To him, the rebels are nothing more than criminals.

"He's not the president of peace," Uribe told reporters Monday in his latest attack on Santos. "He's the president who asks the courts for impunity for terrorists, the president who got elected in the name of security and who is leading the country on the road to the re-establishment of violence."

Uribe has been both speaking and tweeting relentlessly against the talks.

"What democracy sits down to negotiate with terrorists who continue to murder its police and soldiers?" he tweeted last month after publishing a photograph of the corpses of three slain police on a roadside.

This week, he pointed out that rebels killed two police officers as they accompanied government workers on a land-restitution mission. Santos has refused to negotiate under a cease-fire, instead preferring to keep the FARC under constant military pressure.

Santos' initial response to Uribe's withering verbal attacks was to hold his tongue. But lately he has been returning the rhetorical fire, calling Uribe a "street ruffian" who "hides a knife" beneath the rustic poncho he fancies.

And now Colombian prosecutors have reopened a criminal investigation into accusations that Uribe formed a paramilitary death squad nearly two decades ago while he was a law-and-order state governor.

The men's feud reflects deep, longstanding divisions between the conservative provincial landowners whom Uribe represents and a more progressive urban class. The latter believes that Santos' efforts to compensate the conflict's victims and return millions of acres of stolen land to displaced peasants can address the FARC's main grievances and produce a lasting peace.

Uribe's opponents accuse him of continuing to stoke death squads that have killed thousands since they were first formed in the 1980s to protect ranchers and cocaine traffickers from rebel kidnapping and extortion. Among their victims: peasants agitating to reclaim stolen land. From January through September 2012, the United Nations says, at least 37 human rights and land-recovery activists were killed in rural Colombia.

"Uribe has a lot of unsettled scores," as do the "ranchers and businessmen who enriched themselves off land theft and drug trafficking," said Ivan Cepeda, a leftist congressman who wants Uribe in jail.

Uribe denies any association with such illegal groups.

But detractors say he successfully weakened the FARC in an alliance with shadowy groups that backed the far-right militias. More than 60 lawmakers allied with Uribe have been convicted of colluding with or benefiting from ties with far-right militias since 2006.

The case that prosecutors reopened against Uribe in January alleges that he and his brother Santiago formed a far-right militia on the family ranch, Guacharacas, in the Antioquia state town of San Roque in 1995, when Uribe was governor. Citing testimony from two imprisoned witnesses, prosecutors contend the ranch was used as a base of operations for the group, whose members allegedly committed "multiple crimes including massacres and selective killings."

Uribe did not respond to a question about the case during an interview with The Associated Press last month, but his lawyers have repeatedly denied the charges.

Uribe attorney Jaime Granados called the case "insane," and said he would prove "the whole thing is a farce."

While it is difficult to say whether Uribe's criticisms of the peace process have affected it in any way, the slow progress of the talks has only hurt Santos politically. He hasn't said he will run for re-election but has repeatedly stressed he will pull the plug on the talks unless significant progress is made.

Uribe is constitutionally barred from running again but has formed a political party that is expected to field a candidate. One potential nominee: the president's cousin, Francisco Santos, who was Uribe's vice president and now calls the current government "the most intolerant Colombia has had in many years."

That has led some to believe that President Santos wants Uribe out of commission, and that reopening the criminal case against him is just the way to do it.

Recent polls show Uribe with a higher approval rating than Santos: 65 percent compared to 44 percent, according to a mid-February survey conducted by Gallup. The same poll found 62 percent of Colombians said they didn't think a settlement will be reached in the peace talks. The poll surveyed 1,200 people and had a margin of error of plus or minus 3 percentage points.

Both sides have reported advances in the peace talks, particularly on agrarian reform, but have offered no specifics. Colombia is a country where 7 percent of the population owns 80 percent of the land, the National Office of Notaries and Registrars says, and more than 3 million people have been forcibly displaced by illegal armed groups, principally by far-right militias.

Changing the balance of ownership has been a chief demand of the rebels and just as fiercely opposed by wealthy ranchers.

The ranchers' chief spokesman, Jose Felix Lafaurie, has said the group opposes the peace process for the same reason as Uribe: No one should negotiate with "bandits."

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Associated Press writers Vivian Sequera and Frank Bajak contributed to this report.

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China's new leadership faces myriad challenges

BEIJING (AP) — China named the Communist Party's No. 2 leader, Li Keqiang, premier on Friday as a long-orchestrated leadership transition nears its end, leaving the new leaders to confront uneven economic growth, unbridled corruption and a severely befouled environment that are stirring public discontent.

The rubber-stamp legislature endorsed Li for the post, voting 2,940 in favor with one opposed and six abstaining. A day earlier, the legislature similarly appointed Xi Jinping to the ceremonial post of president, making him China's pre-eminent leader following his ascent last November to head the Communist Party and the military.

Though the outcome of the legislative session was a foregone conclusion, it's the result of years of fractious behind-the-scenes bargaining. They hail from different factions: Li Keqiang (pronounced lee kuh chahng) is a protege of the now-retired President Hu Jintao while Xi Jinping (pronounced shee jin ping) is the son of a revolutionary veteran with backing among party elders.

After Li's selection was announced, he and Xi shook hands and smiled for photographers in the Great Hall of the People. Evidence of their and their patrons' ability to forge consensus will be seen Saturday when appointments to the Cabinet and other top government posts are announced.

The son of a revolutionary veteran, Xi cuts an authoritative figure with a confidence and congeniality that was lacking in his predecessor, the aloof and stiff Hu. New Premier Li, from a low level officials' household, has appeared to be a cautious administrator, like Hu, and has not been associated with particular policies on his rise.

Together, Xi and Li now steer a rising global power beset with many domestic challenges that will test their leadership. Chief among them are a sputtering economy that's overly dominated by powerful state industries.

Chinese leaders want to nurture self-sustaining growth based on domestic consumption and reducing reliance on exports and investment. Consumer spending is rising, but not as fast as Beijing wants, which has forced the government to support an economic recovery with spending on public works and investment by state companies.

"If the official data is to be believed, China has been moving in the wrong direction for the past decade - towards 'more investment, less consumption,'" wrote Standard Chartered economists Stephen Green and Wei Li in a research note. "This could create problems."

An increasingly vocal Chinese public is expressing impatience with the government's unfulfilled promises to curb abuses of power by local officials, better police the food supply and clean up the country's polluted rivers, air and soil.

"What do ordinary people care about? Food safety, and smog if you are in a big city, and official corruption," said the prominent Chinese author and social commentator Murong Xuecun, the pen name of author Hao Qun. "They just want to have a peaceful, stable and safe life. To have money and food, and live without worry of being tortured, or having their homes forcefully demolished."

"The entire country is watching for Xi's next step," the writer said.

Wu Xiangdong, chairman of a wine company in central Hunan province and one of the congress delegates who poured out of the vast, ornate Great Hall of the People after Friday's vote, said expectations also were high for Li, the new premier.

"We are very excited and look forward to the premier and the new generation of leaders to be better able to work on the economy, food safety, the environment and improving social equality," Wu said.

Xi's accession marks only the second orderly transfer of power in more than six decades of Communist Party rule. Underlining that transition, after the result of Thurday's vote was announced, the 59-year-old Xi bowed to delegates and turned to his predecessor, Hu. The two shook hands and posed for photos.

Governing China is often plodding as leaders, none of them politically strong enough to prevail individually, forge consensus with their colleagues in the collective leadership.

In some intriguing signs of the new leadership's direction, the congress on Friday appointed as supreme court president Zhou Qiang, a provincial party secretary with a reputation as a progressive and a former aide to a well-known legal reformer. On Thursday, another liberal-minded reformer and a close ally of Hu, Li Yuanchao, was named vice president, breaking with the practice of recent years because he is not in the party's seven-member ruling inner sanctum.

Early indications of the new government's priorities came in a policy program delivered during last week's opening of the legislative session. It pledged to clean up the country's environment, fight pervasive graft and official extravagance and improve welfare benefits for the poor.

The report promised to give private companies a fairer chance to compete, but did not say how Beijing would deal with big state companies controlling most of China's industries that economists have warned need to be curbed in order to preserve future growth. Many experts fear the government will be too hamstrung by powerful interest groups, linked to state industries, to be able to make these changes. But few doubt the urgency of the reform that's needed.

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Follow Gillian Wong on Twitter: http://twitter.com/gillianwong

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Injured South Africa wing Habana faces 10 weeks out

CAPE TOWN (Reuters) - South Africa wing Bryan Habana may miss the rest of the Super Rugby season after tearing knee ligaments in the Stormers's 36-34 win over New Zealand's Waikato Chiefs on Saturday.

Habana was carried off on a stretcher in the second half after being tackled by Sam Cane and falling awkwardly. Coach Alistair Coetzee told reporters the player faces at least 10 weeks on the sidelines.

That means he will only return if the Stormers reach the playoffs, a bitter blow to their chances.

With Habana set to join French Top-14 side Toulon at the end of the Super Rugby campaign, he could have played his final match in the competition he won with the Bulls in 2007 and 2009 before moving to Cape Town.

The win by the Stormers was their first in the tournament this season.

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