CBS Billboard Unit Worth a Look, Clear Channel Exec Says

Clear Channel Outdoor Holdings Inc.’s chief executive officer said the company will consider buying CBS Corp.’s billboard division.

“We’ll look at it,” William Eccleshare, CEO of the private-equity owned outdoor advertising company, said in an interview at the Cannes Lions advertising festival in France. “Everyone is going to be looking at it and sizing it up, seeing if there’s value to be had.”

A deal would boost sales at Clear Channel Outdoor, which has almost 1 million ad displays in more than 40 countries, including huge signs in New York’s Times Square, by almost two thirds. CBS, owner of the most-watched U.S. TV network, was approached by bankers interested in finding buyers for the billboard unit and agreed to listen to proposals, a person familiar with the matter said this month.

CBS is asking $6 billion for its outdoor advertising unit, the Wall Street Journal reported this month, citing unidentified people with knowledge of the operation.

Eccleshare, who became CEO of Clear Channel Outdoor this year, said he’d be surprised if anyone agreed to pay that much.

“Relative to where stocks are trading today, it’s difficult to get to a $6 billion valuation,” Paul Sweeney, a Bloomberg Industries analyst, said in an interview.

Lamar Advertising Co., the Baton Rouge, Louisiana-based owner of outdoor advertising displays, and Clear Channel Outdoor are trading at about nine times 2012 earnings before interest, depreciation, taxes and amortization, Sweeney said. Adding a 15 percent takeover premium, CBS could sell the billboard unit for $4 billion, he said.


Dana McClintock, a spokesman for CBS in New York, declined to comment on Eccleshare’s remarks.

Clear Channel Outdoor rose 1.5 percent to $6.09 in New York trading as of 10:51 a.m. The stock has declined 51 percent this year. CBS, based in New York, rose 1 percent to $31.93.

CBS Chief Financial Officer Joe Ianniello said at a May 30 investor conference that there has been interest in the outdoor business. CEO Les Moonves has said he’d be willing to listen to proposals from interested buyers.

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

Strategic Buyers

“It’s nice to have more than one strategic buyer interested,” Sweeney said. “Having two strategic buyers can lead to a little bit of a price war.”

JCDecaux spokeswoman Agathe Albertini declined to comment.

Clear Channel Outdoor, based in San Antonio, is controlled by Clear Channel Communications Inc., the radio broadcaster owned by Bain Capital LLC and Thomas H. Lee Partners LP. Clear Channel Outdoor had sales of $3 billion in 2011, while CBS Outdoor had $1.89 billion in revenue and JCDecaux had 2.46 billion euros ($3.1 billion) in sales.

In 2011, CBS Outdoor produced 13 percent of CBS’ 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.

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