April 16 (Bloomberg) -- CBS Corp., the broadcaster that’s spinning off its U.S. billboard advertising unit, said it received a favorable tax ruling on the transaction in a private letter from the Internal Revenue Service.
CBS said the IRS approved its proposed plan to convert CBS Outdoor Americas Inc. to a real estate investment trust, which normally is taxed only at the shareholder level.
The unit raised $560 million in a March 27 initial public offering, selling 19 percent of its shares. Parent CBS plans a tax-free spinoff of its remaining 81 percent stake later this year. CBS Outdoor then will convert to a REIT.
“CBS Outdoor’s conversion into a REIT will unlock its true value, and the completion of our Outdoor initiatives will enhance our ability to return capital to our shareholders,” Leslie Moonves, chief executive officer of CBS, said in a statement.
CBS Outdoor jumped 6.7 percent to $30.96 at the New York close and is up 11 percent since the IPO. Shares of the parent company rose 1.9 percent to $60.30 and are down 5.4 percent this year.
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