Platinum Equity to Buy CBS’s International Billboard Unit
Platinum Equity LLC, a Los Angeles private-equity firm founded by Tom Gores, agreed to buy CBS Corp. (CBS)’s international billboard unit for about $225 million.
The proposed transaction is subject to completion of works council consultation and other conditions, New York-based CBS and Platinum Equity said today in a statement. CBS Outdoor International operates in the U.K., Ireland, France, Italy, the Netherlands, Spain and China.
CBS, owner of the most-watched U.S. TV network, said in January it planned to sell its international outdoor business and convert its U.S. billboard operation into a real-estate investment trust, or REIT. The structure is a popular tool for companies to lower taxes and improve investor returns. REITs don’t pay federal income taxes, with the understanding they distribute at least 90 percent of taxable earnings as dividends.
“There was a range of expectations and this number is right in the middle,” David Bank, an analyst at RBC Capital Markets in New York, said in an interview. Bank, who recommends buying CBS shares, said he had expected the unit to fetch about $250 million.
The company plans to primarily use proceeds from the sale to repurchase shares, Chief Financial Officer Joe Ianniello said at a June 4 investor conference.
CBS, controlled by Chairman Sumner Redstone, fell less than 1 percent to $52.68 at the close in New York. The stock has climbed 38 percent this year, while the Standard & Poor’s 500 Index has added 18 percent.
CBS filed for an initial public offering for the U.S. billboard division last month, with a portion of the proceeds to be used to repay a note. The IRS is weighing whether to narrow the legal definition of real estate for the purposes of converting to a trust. CBS will own 80 percent of the U.S. operation after the share sale.
“Today’s news represents a key strategic milestone for CBS,” Chief Executive Officer Leslie Moonves said in the statement. “As we continue to focus our company around creating and distributing premium content, we are very pleased to announce that we will achieve very good value for these Outdoor properties.”
To contact the reporter on this story: Andy Fixmer in Los Angeles at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Palazzo at email@example.com