Tim Hortons Inc is likely to raise its debt levels and buy back shares, but the Canadian coffee-and-doughnut chain is not about to take on as much debt as an activist investor is pushing for, Chief Executive Paul House said on Thursday.

Hedge fund Highfields Capital, which owns about four percent of Tim Hortons shares, has been pressuring Tim Hortons to boost shareholder returns and incorporate new board members with more financial experience.

"We are a very healthy company and we want to stay a very healthy company," said House in an interview with Reuters after the company's annual shareholder meeting in Toronto on Thursday.

"Anything we do is going to be a long term thing. We have never looked at anything short term," said House, who is set to step down as CEO in July. "Our shareholders that have been with us a long time, they hold our stock because they have confidence that we are very conservative, long term thinkers."

According to documents viewed by Reuters, Highfields wants Tim's to raise some $3.4 billion in debt and buy back roughly 37 percent of its outstanding shares.

House, who is set to hand over the reins to Nestle veteran Marc Caira on July 2, said Tim's board has not yet come to a conclusion on the debt levels it is comfortable with, but it remains focused on maintaining an investment grade rating and it would not go to the levels being suggested by Highfields.

"I don't think that we'd leverage up to that point no, not at all," said House.

(Reporting by Solarina Ho; Editing by Jeffrey Hodgson)