(Updates CBS Outdoor shares, adds CBS Corp shares, background)
By Jennifer Saba and Tanya Agrawal
March 28 (Reuters) - Shares of CBS Outdoor Americas Inc rose as much as 9 percent in their trading debut, valuing the outdoor advertising company at about $3.7 billion as it pushes for a bigger slice of the ad market and its parent CBS Corp focuses more on content.
CBS Outdoor's solid debut on Friday contrasted with that of "Candy Crush Saga" game maker King Digital Entertainment Plc earlier this week, suggesting that demand remains strong for shares in stable companies with strong cash flow.
"What the King IPO did is bring back some sanity in how offerings are priced," said Francis Gaskins, research director at Equities.com. "What investors like are big established companies with high barriers to entry."
CBS Outdoor's shares touched a high of $30.46 in morning trading on the New York Stock Exchange after its initial public offering was priced at $28 per share, the top end of the expected price range.
King's shares fell as much as 16 percent on Wednesday after one of the most hyped initial public offerings the year.
CBS Outdoor has long been seen as an awkward fit for a CBS Corp, owner of the most-watched TV network in the United States.
"This seemed like a very good financial idea to do a transaction that would unlock the value in CBS Outdoor," CBS Chief Executive Les Moonves told Reuters ahead of the IPO.
"It enables us to get quite a bit of capital to go forward with our desire to increase our profile in the content business," he said. The IPO raised about $560 million.
CBS Outdoor's shares were up 6.25 percent at $29.75 in early afternoon trading, while those of CBS Corp, which has a market value of about $36.5 billion, were up 1.6 percent at $62.46.
CBS Outdoors Chief Executive Jeremy Male said he aimed to convince big advertisers to move more of their spending to his company's billboards and other displays.
U.S. outdoor media represents less than 5 percent of advertising spending, compared with 8 percent in the rest of the world, Male said in an interview.
"The top 50 advertisers only spend 2 percent of revenue on outdoor," said Male, who joined the company in September after serving as a top executive at JCDecaux SA, the world's largest outdoor company.
"We see a great opportunity to work hard and develop that advertiser base," he said.
CBS Outdoor counts Apple Inc, McDonald's Corp and Sony Corp among its clients.
CBS Outdoor's offering reduced CBS Corp's stake in CBS Outdoor to 83 percent. Its holding will drop to about 81 percent if underwriters fully exercise options to buy additional shares.
Goldman Sachs, BofA Merrill Lynch, J.P. Morgan and Morgan Stanley are lead underwriters of the offering.
CBS Corp plans to divest the rest of shares through a tax-free splitoff later this year, after which CBS Outdoor will trade as a tax-efficient real estate investment trust (REIT).
CBS Outdoor has about 329,100 displays in the United States - many in desirable locations such as the Bay Bridge in San Francisco and Grand Central Station in New York - and about 26,100 displays across Canada and Latin America.
Male said CBS Outdoor would invest to make more of its displays digital. About 1.5 percent are in digital format now.
Outdoor advertising companies have been converting their traditional billboards to digital billboards as this allows them to run multiple ads on each display.
"If you are looking for cover and frequency on a particular demographic, people's travel patterns are repetitive," Male said. "It's a great argument for greater efficiency for advertising dollars."
CBS Outdoor's competitors include Clear Channel Outdoor Holdings Inc and Lamar Advertising Co.
CBS Outdoor reported revenue of $1.3 billion and net income of $143.5 million for 2013. The company had about 19,700 clients in the United States at the end of the year. (Editing by Bernard Orr, Savio D'Souza and Ted Kerr)