CBS Outdoor climbs in 1st day on NYSE
NEW YORK, N.Y. - CBS Outdoor's stock rose 5.4 per cent Friday in its debut on the New York Stock Exchange.
The New York-based outdoor advertising subsidiary of broadcast company CBS Corp. raised $560 million in its initial public offering, pricing 20 million shares at $28 each, the high end of the expected range. The banks managing the IPO may buy another 3 million shares, adding to proceeds.
The company's stock closed at $29.50 Friday, giving it a market value of about $3.54 billion.
CBS Outdoor said in a regulatory filing that it had approximately 330,000 displays available for advertising in the U.S. and about 26,200 displays across Canada and Latin America as of 2013's end. Its customers include Apple Inc. and McDonald's Corp.
The company is trying to keep pace with the times, converting traditional billboard displays to digital ones. At the end of last year the company had 373 digital billboards in the U.S.
CBS Outdoor said in its filing that digital billboards produce about three to four times more revenue per display than traditional billboards, on average. The company is ramping up its efforts to convert more of its traditional billboards to digital billboards as conversion costs decline.
Once the offering is complete, CBS will own more than 80 per cent of CBS Outdoor. CBS plans to divest its shares of CBS Outdoor through a split-off later this year. When that happens, CBS Outdoor said it plans to convert to a real estate investment trust. CBS announced REIT conversion plans for the subsidiary in January 2013.
REITs return 90 per cent of their profits to shareholders and don't have to pay taxes on those profits.
CBS Outdoor said it plans to use the offering's proceeds in part for the cash portion of the distribution to shareholders required in its REIT conversion.
In 2013, CBS Outdoor reported $1.29 billion in revenue. That's up slightly from $1.28 billion in the previous year.
CBS Outdoor Americas Inc. trades under the "CBSO" ticker symbol. .