Adam Weiss & James Crichton's Scout Capital Boosts Coca-Cola Enterprises (CCE) Stake ~ market folly

Monday, October 18, 2010

Adam Weiss & James Crichton's Scout Capital Boosts Coca-Cola Enterprises (CCE) Stake

James Crichton and Adam Weiss' hedge fund Scout Capital recently filed a 13G with the SEC regarding shares of Coca-Cola Enterprises (CCE).

Per the filing, Scout Capital disclosed a 5.01% ownership stake in CCE with 16,719,500 shares due to portfolio activity on October 4th. This is a 35% increase in their position size as Crichton and Weiss' hedge fund held 12,350,000 shares back on June 30th.

Coca Cola Enterprises is a bit of an event driven play as Coca-Cola (KO) recently acquired the North American bottling operations of Coca-Cola Enterprises (CCE). CCE shareholders received a cash payout of $10 per share and the stock dropped 30% to reflect this.

Following the transaction, Goldman Sachs added CCE to its America Buy List with a price target of $28 per share (CCE currently trades around $24). Goldman feels that Coca-Cola Enterprises has "a stronger top-line growth outlook, a better margin/return profile and a dominant market share position." In the past, we've detailed how Jamie Dinan's York Capital was fond of Coca-Cola Enterprises and likes CCE's free cash flow.

This is the first time we've covered hedge fund Scout Capital and we will continue to do so from here on out. Adam Weiss founded Scout with James Crichton in August 1999. Before founding the hedge fund, Weiss worked at Dan Loeb's Third Point LLC (who we recently revealed has positions in gold bullion and Potash). Weiss received his degree from Harvard College (Phi Beta Kappa and a John Harvard Scholar) and his MBA from Columbia University.

Taken from Google Finance, Coca-Cola Enterprises (CCE) is "engaged in marketing, producing and distributing non-alcoholic beverages. The Company serves a market of approximately 421 million consumers throughout the United States, Canada, the United States Virgin Islands and certain other Caribbean islands, Belgium, continental France, Great Britain, Luxembourg, Monaco, and the Netherlands."

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