CBS Outdoor priced its shares at $28 apiece on Thursday, suggesting that the company will have a market value of about $3.3 billion when it begins trading on the New York Stock Exchange on Friday.
Twenty million shares are being sold in the initial public offering, raising $560 million.
CBS Outdoor is among the largest advertising companies in the country, operating thousands of billboards, airport signs and digital displays from New York to Los Angeles.
But until now, the business has been an awkward fit within the parent company CBS, best known for its broadcast television network.
The initial public offering will allow each company to focus on its core competency. CBS will be a giant broadcaster, as well as the owner of the film studio Showtime, with a market value of about $37 billion. CBS Outdoor, meanwhile, will be a standalone advertising company with a market capitalization expected to be about $3.6 billion.
CBS Outdoor will separate from its parent company in what is essentially a three-step process.
The shares being sold only account for 17 percent of the new company. The parent company CBS will continue to own 83 percent of the company for at least six months.
After that, CBS will offer all of its remaining shares in CBS Outdoor to current CBS shareholders, who will receive new CBS Outdoor shares for their CBS shares. The move will retire some CBS stock, and transfer all of CBS Outdoor shares to public investors.
Then, CBS Outdoor will become a real estate investment trust, a tax-efficient structure that is required to return most profits to shareholders. CBS Outdoor plans to pay a quarterly dividend of 37 cents a share.
As a standalone company, CBS Outdoor’s will focus will remain in the big cities, where it competes with JCDecaux, Clear Channel Outdoor, and Lamar Advertising.
For CBS, the parent company, shedding the outdoor business will relieve it of a profitable distraction. For years, rumors persisted that JCDecaux would make a bid for CBS Outdoor. That deal never materialized, though CBS did dispose of its European outdoor advertising business last year, selling it to Platinum Equity for an undisclosed sum.
CBS Outdoor is tapping the public markets amid a wave of successful I.P.O.’s. Most new offerings are trading above their opening prices, and the volume of new offerings is at the highest level since the dot com boom more than a decade ago.
But not all new offerings are faring well. On Wednesday, shares of King Digital, the maker of the Candy Crush game, fell nearly 16 percent in their first day of trading.
