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CBS Said to Permit Bankers to Find Billboard Unit Buyers

CBS CEO Leslie Moonves
Leslie Moonves, president and chief executive officer of CBS Corp. Photographer: Peter Foley/Bloomberg

CBS Corp., owner of the most-watched U.S. TV network, was approached by bankers interested in finding buyers for its billboard unit and agreed to listen to proposals, said a person with knowledge of the situation.

CBS agreed to meet potential buyers, the person, who wasn’t authorized to talk publicly, said late yesterday. The media company didn’t sign an agreement or agree to a term sheet and doesn’t plan to distribute an offering book, said the person, who declined to identify the bankers.

A sale of the outdoor advertising unit would leave the company with divisions that create and distribute entertainment content for television, radio and cable networks. Chief Executive Officer Leslie Moonves said on a Sept. 20 conference call CBS would listen to proposals from interested buyers. Chief Financial Officer Joe Ianniello said at a May 30 investor conference there has been interest in the outdoor business.

“There’s definitely a lot of interest in Outdoor,” Ianniello said at the conference in London. “I will always look to maximize value, whether it’s through operations or through an M&A transaction. We’re very excited about the business, so we’re going to continue to operate it. If something comes along that makes some sense, we’ll let everybody know.”

Decaux Interest

CBS wants $6 billion for the division, the Wall Street Journal reported yesterday, citing unidentified people with knowledge of the operation. Some buyers believe it’s worth closer to $4 billion, the newspaper said.

Dana McClintock, a spokesman for New York-based CBS, declined to comment yesterday on the prospect of selling the outdoor unit. He also declined to comment on the Wall Street Journal report.

CBS, controlled by Chairman Sumner Redstone, climbed 2.8 percent to $31.47 at the close in New York. The shares have gained 16 percent this year.

In March 2011, JCDecaux SA Chairman and co-CEO Jean-Francois Decaux said he’s a natural buyer of CBS Outdoor. In 2009, he said the company would consider buying the division or Clear Channel Outdoor Holdings Inc. to become the biggest outdoor advertising company in the world.

“Yes, Mr. Decaux, who we know very well and we like, makes statements about how he’d like to buy our outdoor company,” Moonves said May 3, 2011 on an earnings conference call. “He has our phone number. If he wants to make an offer, we’ll always listen to it.”

Outdoor Revenue

In 2011, CBS Outdoor produced $1.89 billion in revenue, 13 percent of the company’s total sales. The unit is the third-biggest after entertainment, which includes the CBS television network, and the Local Broadcasting division that operates the company’s local TV and radio stations.

This year, the division will benefit from political campaigns and the Summer Olympics in London, where CBS holds the advertising contract for that city’s subway system, Ianniello said on the company’s May 1 earnings conference call.

Outdoor sales climbed about 1 percent to $416 million in the first quarter from a year earlier. Revenue will rise about 2 percent in the current period, compared with a year earlier, Ianniello said on the May 1 call. Olympics advertising will boost third-quarter results, he said.

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