Jan 16 CBS Corp is planning to convert
part of its billboard division into a real estate investment
trust (REIT), the company said on Wednesday.
The media conglomerate plans to turn its billboard business
in the Americas, which includes Canada, Latin America and South
America, into a publicly traded trust known as a REIT. Its
outdoor advertising businesses in Europe and Asia are up for
Investors and analysts long have anticipated that CBS would
make a move with that division made up of billboards and other
outdoor marketing space known in advertising parlance as "out of
Shares of CBS rose 8 percent in after hour trade after
closing at $37.94 on Wednesday.
"We are increasingly enthusiastic that this transaction - as
well as the sale of our business in Europe and Asia - will
achieve significant value for our shareholders," CBS Corp Chief
Executive Leslie Moonves said in a statement.
As a REIT, it can avoid paying corporate level income taxes
if it distributes at least 90 percent of its taxable income to
shareholders in the form of dividends.
The outdoor division represented about 13 percent of the
company's total revenue of $10.8 billion for the nine months
ending September 30.
CBS has yet to determine the structure of the REIT. The
process requires the approval of the U.S. Internal Revenue
Service and the company said the conversion could happen next
Outdoor rival Lamar Advertising Co said last August
it was considering converting to a REIT. [ID: nL4E8J84P6]
CBS is the highest-rated U.S. broadcast network in overall
viewers with its stable of hits such as "The Big Bang Theory"
and "NCIS." It also operates cable networks including Showtime,
the publishing house Simon & Schuster, and a group of radio