Current Price – CBS $61.80, CBSO $31.37
Offer Price – $107.53 stock of CBSO for $100 stock of CBS
Upside – 7.53% or $460 for Odd Lot holders
Expiration date – June 30, 2014
Odd Lot holders (less than 100 shares) are not subject to proration
Buy 99 CBS and sell short 210 CBSO. Lock in gain of $460. Tender CBS for CBSO. Cover short position after receiving the exchange shares.
CBS shareholders will have the opportunity to exchange all, some or none of their shares of CBS Class B common stock for shares of CBS Outdoor common stock at a 7% discount, subject to an upper limit of 2.1917 shares of CBS Outdoor common stock for every share of CBS Class B common stock. If the upper limit is not in effect, tendering shareholders would receive approximately $107.53 of CBS Outdoor common stock for each $100.00 of CBS Class B common stock accepted in the exchange offer.
The final exchange ratio used to determine the number of shares of CBS Outdoor common stock that tendering shareholders will receive for each share of CBS Class B common stock accepted in the exchange offer, subject to the upper limit, will be based upon the simple arithmetic average of the daily volume-weighted average prices of CBS Class B common stock and CBS Outdoor common stock on the NYSE during a three-day period currently expected to be July 7, 8, and 9, 2014.
CBS owns 97 million shares of CBS Outdoor common stock, which represents approximately 81% of the outstanding common stock of CBS Outdoor. The largest possible number of shares of CBS Class B common stock that will be accepted in the exchange offer will be equal to 97 million divided by the final exchange ratio.
No proration for Odd Lot holders:
Direct or beneficial holders of less than 100 shares of CBS Class B common stock who validly tender all of their shares will not be subject to proration if the exchange offer is oversubscribed. Direct or beneficial holders of more than 100 shares of CBS Class B common stock, and those who own less than 100 shares but do not tender all of their shares, will be subject to proration.
Source of Funds:
Not applicable as exchange transaction.