CBS Corp., the media company that owns the most watched U.S. television network, plans to turn its billboard-advertising business in the Americas into a real estate investment trust, alleviating its tax burden. CBS shares rose sharply on the news late Wednesday
CBS also is seeking to divest the outdoor-ad business’s European and Asian operations, the New York-based company said Wednesday in a statement. That division will be considered a discontinued operation as of Dec. 31, 2012, CBS said.
“We believe the moves we are announcing today will unlock the tremendous value of these unique quality assets,” Chief Executive Officer Leslie Moonves said in the statement. “We have studied the benefits of converting our Americas operations into a REIT, and 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 will seek approval for the REIT plan from the Internal Revenue Service during the first quarter. If the request is granted, the business would be converted in the year beginning in 2014, the company said.
The REIT structure offers tax advantages to companies that qualify. In the U.S., they must distribute at least 90 percent of their taxable income to shareholders and don’t pay corporate taxes on that amount.
In extended trading, CBS shares were up 8.3 percent at $41.10 each.
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