Is Cott a terrible investment?

Investors hate uncertainty. Much of the uncertainty around the fate of Cadbury Schweppes' drinks division is now gone. The company says Schweppes will be spun off and get a listing on the NYSE next year. The stock moved up about 2 percent on the news.
At its core though, the development is a massive disappointment for management. CEO Todd Stitzer admitted today that post credit crunch, the debt market is still in terrible shape. And that an acceptable sale price was unlikely. In other words no private equity company was interested in ponying up the cash. Obviously. What financier would be willing to cut a 15 billion buck cheque to private equity today? Nobody that’s who.
Still the worst off today would seem to be Canada’s Cott Corp, a bit player in the soft drinks market. In March, when Cadbury announced its plan to shed Schweppes, one of the scenarios being touted by analysts was private equity would buy Schweppes and then merge it with Cott. Another wilder, more outlandish scenario was that Cott might even buy Schweppes. Mon Dieu! Considering Schweppes is 28 times bigger than Cott it would have been a pretty nutty deal. But not out of the question considering the credit zeitgeist at the time.
Alas all that is out the window today. Cott shares lost about another 1 percent of their value today. The company is worth about half of what it was a year ago. Rubbish investment going forward? Analyst David Hartley at BMO told me today all might not be lost for Cott shareholders. The company is so cheap now that private equity may buy it anyway. If it was attractive during the height of the boom at 16 bucks. And Hatley maintains it’s still attractive today at 8 bucks. Dire credit market be damned.