Back to top

Analyst Blog

Media giant CBS Corporation (CBS - Analyst Report) announced that it has received a favorable tax ruling from the Internal Revenue Service (IRS) in a private letter regarding the conversion of its subsidiary CBS Outdoor Americas Inc. (CBSO - Snapshot Report) into a real estate investment trust (REIT). Shares of CBS Corp. rose 2% yesterday while that of CBS Outdoor rose nearly 7%.

Earlier this month, CBS Outdoor had concluded an initial public Offering (IPO) of 19% of its stake. 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 Corp. for its contribution, and use the remaining amount to pay shareholders’ in correlation with the conversion into a REIT.

The remaining 81% stake in CBS Outdoors is held by CBS Corp. The latter plans to sell it through a tax-free split-off later this year. CBS Outdoor plans to convert itself into a REIT going forward.

This is important from taxation point of view, as REITs enjoy tax benefits given the norm of paying 90% of its income as dividends to shareholders. As per CBS Corp., the conversion will help maximize the shareholders wealth.  

CBS Outdoors America is a leading out-of-home media companies with significant presence in the United States, Canada, Mexico and South America. As of Sep 30, 2013, the company had nearly 329,100 displays in the United States and about 26,100 displays throughout Canada and Latin America. Its clientele includes McDonald's Corp. (MCD - Analyst Report) and The Gap, Inc. (GPS - Analyst Report).

Currently, CBS Corp. carries a Zacks Rank #3 (Hold).

Read the Full Research Report on CBS
Read the Full Research Report on CBSO
Read the Full Research Report on MCD
Read the Full Research Report on GPS

Zacks Investment Research

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
HI-CRUSH PT… HCLP 68.05 +4.74%
CTPARTNERS… CTP 12.91 +3.12%
QIHOO 360 T… QIHU 90.56 +3.11%
HOLLYSYS AU… HOLI 22.85 +2.97%
BONANZA CRE… BCEI 61.57 +2.94%