CBS Billboard Unit Files for IPO in Step Toward Split

CBS Outdoor Americas Inc. filed for an initial public offering as part of parent company CBS Corp.’s plan to split off the billboard division.

The offering size, $100 million, is a placeholder amount that may change. A portion of the proceeds will be used to repay a CBS note, the company said yesterday in a regulatory filing. CBS will own about 80 percent after the offering, and distribute the stock to its investors.

CBS said in January that it planned to convert the outdoor advertising business into a real-estate investment trust, or REIT. The structure has become a popular tool for companies to lower taxes and improve returns for investors. REITs don’t pay federal income taxes, with the understanding that they distribute at least 90 percent of taxable earnings to shareholders as dividends.

The IRS is weighing whether to narrow the legal definition of real estate for the purposes of converting to a trust.

CBS, owner of the most-watched U.S. TV network, rose 1 percent to $49.28 at 11:55 a.m. in New York. As of yesterday, the stock had gained 28 percent this year, compared with the 13 percent increase for the Standard & Poor’s 500 Index.

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