CBS Completes CBS Outdoor Shares Exchange, Declares Outcome - Analyst Blog


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Media giant CBS Corporation ( CBS ) declared the final outcome of the offer made by it to the stockholders, to swap their CBS Class B shares for shares of CBS Outdoor Americas Inc. ( CBSO ) held by CBS.

Per the previously announced exchange offer, which ended on Jul 9, for each CBS Class B share accepted in the deal, 2.1689 shares of CBS Outdoor stock will be swapped.

Prior to the termination, approximately 304.1 million CBS Class B shares were tendered, as stated by the exchange agent Wells Fargo Bank, N.A. However, of these 304.1 million shares, CBS accepted nearly 44.7 million of the tendered stock in exchange of 97 million CBS Outdoor shares held by CBS.

Owing to the oversubscription of the exchange deal, the company accepted tendered Class B shares on a pro rata basis, proportional to the shares validly tendered and not withdrawn validly.

According to the final terms, stockholders who validly tendered all their shares and owned less than 100 CBS Class B shares, did not fall under the proration category, as all their shares were accepted by the company. On the other hand, for all the other CBS Class B shares, which were validly tendered but not validly withdrawn, the final 14.7740% pro rata factor was applicable.

CBS had recently announced plans to divest its entire 81% stake in the spun-off billboard business CBS Outdoors through an exchange offer. This was a move made by the company to inch closer to its plans of converting its subsidiary CBS Outdoor into a Real Estate Investment Trust (REIT).  

Conversion into an REIT is important from the taxation viewpoint as REITs enjoy tax benefits, given the norm of paying 90% of its income as dividends to shareholders. As per CBS Outdoors., the conversion will help maximize shareholder wealth.

For CBS, which competes with Lions Gate Entertainment Corp. ( LGF ) and The Walt Disney Company ( DIS ), the split will allow more focus on its primary operations i.e. developing, producing and distributing finest quality content across all platforms on a worldwide basis.

CBS currently carries a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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