) declared the final exchange terms in connection with its
CBS Outdoor Americas Inc.
). Per the terms of exchange, for each CBS Class B share accepted
in the deal, 2.1689 shares of CBS Outdoor stock will be swapped.
Also, according to Wells Fargo Bank, N.A., the exchange agent,
approximately 304.1 million CBS Class B shares were tendered before
the exchange offer was terminated. This included roughly 100.2
million shares that were tendered validly, but not withdrawn
validly and 203.9 shares, which were tendered by notice of assured
delivery. Of these 304.1 million shares, CBS accepted nearly 44.7
million of the tendered stock in exchange for 97 million CBS
Outdoor shares held by CBS.
The company anticipates declaring the final proration factor
accurately after the termination of the guarantee delivery period,
which is expected on Jul 14, 2014. Following the final
announcement, the tendered CBS Class B shares, which are unaccepted
for exchange, will be given back to the tendering stockholders.
CBS recently announced that it will 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).
The offer is expected to be tax free for participating shareholders
in the U.S. and is likely to be the final step toward the
separation of CBS Outdoor, which began trading as a separate entity
in March earlier this year. CBS has 97 million shares of the
CBS Outdoor had concluded an Initial Public Offering (IPO) of 19%
of its stake in April 2014. After eliminating underwriting
discounts and commissions, the net proceeds from the IPO came in at
$615 million. CBS Outdoor will use the net proceeds to pay CBS for
its contribution, and use the remaining amount to pay shareholders
in correlation with the conversion into a 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.
The Walt Disney Company
), 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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