CBS Outdoor IPO Looking At Raising Up To $560 Million

Gail Chiasson, North American Editor

Outdoor advertising company CBS Outdoor Americas Inc. plans to raise up to $560 million in an initial public offering of its common shares, valuing the company at about $3.36 billion.

CBS Outdoor, part of media conglomerate CBS Corp., expects its offering of 20 million shares to be priced between $26 and $28 each, the company said in a filing with the U.S. Securities and Exchange Commission on Monday.

CBS, whose stake will reduced to 83% after the offering, plans to convert CBS Outdoor into a real estate investment trust (REIT). As a REIT, it can avoid paying corporate-level income taxes if it distributes at least 90% of its taxable income to shareholders in the form of dividends.

CBS Outdoor, whose biggest competitors are Clear Channel Outdoor Holdings Inc. and Lamar Advertising Co., says that its net income rose 27% to $143.5 million on revenue of $1.29 billion in 2013. The company had approximately 330,000 displays in the U.S. and about 26,200 displays across Canada and Latin America as of Dec. 31/13. It has displays in some of the most heavily trafficked locations such as the Bay Bridge in San Francisco, Sunset Boulevard in Los Angeles and Grand Central Station and Times Square in New York City.

The company expects to list on the New York Stock Exchange under the symbol ‘CBSO’.

Goldman Sachs, BofA Merrill Lynch, J.P. Morgan and Morgan Stanley are the lead underwriters of the offering. The underwriters will have a 30-day option to buy an additional three million shares. (CBS will own approximately 81% of the outstanding stock of CBSO if underwriters exercise their option to purchase additional shares in full.)

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