CBS shares jump on REIT conversion plan for Americas outdoor unit
Jan 17 (Reuters) - Shares of CBS Corp rose to a decade-high a day after the media conglomerate said it will convert part of its billboard division into a real estate investment trust (REIT).
CBS, best known for its broadcast network, said on Wednesday it plans to turn its outdoor business in the Americas - which includes Canada, Latin America and South America - into a publicly traded trust.
Its outdoor advertising businesses in Europe and Asia are up for sale.
CBS shares rose as much as 12 percent to $42.55 on the New York Stock Exchange on Thursday. They were later trading at $41.27.
As many as seven brokerages raised their price targets on the stock on Thursday.
CBS could spin off the Americas outdoor division or structure a split allowing shareholders to exchange CBS stock for shares in a new company, Barclays analyst Anthony DiClemente wrote in a note.
There could be strategic interest for the international segment from players already entrenched in the European market despite challenging market conditions, DiClemente said.
"We expect CBS Outdoor could be worth $5 billion to $6 billion in a REIT structure, about $1 billion more than our prior sum-of-the-parts valuation due to the net present value of low tax payments post-conversion," Deutsche Bank analyst Doug Mitchelson wrote in a note.
He raised his price target on the stock to $47 from $40. (Reporting by Sruthi Ramakrishnan in Bangalore,)
© Thomson Reuters 2017 All rights reserved.