CBS To Divest 81% Stake In CBS Outdoor - Update

(RTTNews) - CBS Corp. (CBS.A, CBS) Wednesday said it plans to divest 81 percent stake in CBS Outdoor Americas Inc. (CBSO), which was spun-off in March this year by the media giant.

The New York-based television network plans to divest the 81 percent stake through an exchange offer that is expected to be tax-free for participating shareholders. CBS shareholders can exchange all, some or none of their shares of CBS Class B shares in CBS Outdoor at a 7 percent discount.

CBS Chief Executive Leslie Moonves said, "We fully believe that CBS Outdoor will continue to be successful as a stand-alone company. And for our part, CBS Corporation can focus on what we do best, which is invest, produce and distribute premium content across all platforms and all around the world."

"CBS has been a great owner for many years, but as a wholly independent company, we believe we can take CBS Outdoor to new heights," said Jeremy Male, CEO of CBS Outdoor.

After the split, CBS Outdoor intends to convert into a real estate investment trust, or REIT. CBS had spun off CBS Outdoor Americas, its outdoor advertising company, in March 2014 and had raised $560 million in the IPO. CBS Outdoor planned to qualify to be taxed as a real estate investment trust or REIT for federal income tax purpose. REIT generally do not have to pay US federal income taxes, but are required to distribute at least 90 percent of taxable earnings as dividends.

New York-based CBS Outdoor is a lessor of advertising space or displays on out-of-home advertising structures and sites across the US, Canada and Latin America. The company's portfolio primarily consists of billboard displays.

CBS is currently trading at $62.03, up $0.90 or 1.47%, while CBSO is trading at $31.58, down $0.48 or 1.50%, both on the NYSE.