The Low Post News

CBS Outdoor Up on First Day

Stock was surging for CBS Outdoor on Friday on its debut on the NYSE. Shares of the advertising company a subsidiary of CBS were up by $2.02 or over 7.2% in trading in the morning to $30.02 after they peaked earlier Friday morning at $30.47.

The initial public offering for CBS Outdoor Americas included 20 million shares that were priced per share at $28, which was the high end of a range that was expected to be between $26 and $28 a share.

The company based in New York raised in its IPO over $560 million. At the price of the IPO, the market value for CBS Outdoors would be $3.36 billion. There would be approximately 120 million outstanding shares following the offering.

The company is giving underwriters an option of 30-days to buy another 3 million shares if there is a strong demand.

CBS Outdoors announced in one of its regulatory filings that it had about 330,000 available displays for U.S. advertising with just under 26,200 displays throughout Latin American and Canada as of the end of 2013. Customers for CBS Outdoors included McDonald’s Corp and Apple, Inc.

The company is attempting to maintain pace with today’s changes by converting the traditional billboards to digital ones. As of the end of 2013, the company had 373 digital billboards across the U.S.

CBS Outdoor in the regulatory filing said digital billboards now produce as much as four times more revenue for each display than do traditional billboards.

The company has ramped up efforts to convert additional traditional billboards over to digital as the costs of conversion decline.

Once the IPO is complete, CBS will have over 80% ownership of CBS Outdoor. CBS is planning to divest shares of the outdoor advertising company by doing a split-off later in 2014.

Once that takes place, CBS Outdoor is planning to convert and become a real estate investment trust. The REIT plans were announced by CBS in January of 2013.

REITs return 90% of their profits back to their shareholders and do not have to pay any taxes on the profits.

Leave a Reply

Your email address will not be published. Required fields are marked *