Shares in soft drinks group Cott Corp. rose sharply yesterday (27 May) after the private equity group Crescendo Partners said it had acquired an 8.7% stake in the Canadian-based private-label specialist.

The Delaware-based PEG also stated that it planned to take an active role in the company as a large shareholder.

Cott's shares rose by 26 cents, or 8.2%, to close at $3.43 on  Tuesday. The rise during the day had been as sharp as 16%.

In a regulatory filing with the Securities and Exchange Commission (SEC), Crescendo said it bought around 5.9m Cott shares, with principals of the investment group acquiring a further 276,966 shares.

Crescendo said the the shares were "very undervalued and represented an attractive investment opportunity".

A first-quarter loss, announced in April and attributed to rising costs and falling volumes, was the latest in a series of disappointing announcements from Cott, which has seen its share price fall by 52% since January. In February, Cott said Wal-Mart was reducing the amount of shelf space given to Cott-produced lines, resulting in a downgrade from UBS.

Crescendo said it was engaged in discussions with Cott management concerning its business and future plans, and was also discussing having representation on the company's board.