Most of the proceeds from the debt offering will be paid back to CBS Corp., along with an $800 million loan that CBS Outdoor will seek. The payments to CBS will be in consideration for the assets contributed to the spinoff.
CBS plans an IPO for 20% or less of CBS Outdoor later this quarter. Long-term, CBS has said it intends to divest all of its CBS Outdoor stake. In September, CBS cut a deal to sell its European and Asian outdoor advertising businesses for $225 million.
The spinoff process will plump CBS’ cash coffers, which stood at $226 million at the end of the third quarter. The Eye has been on a tear of buying up its own stock, spending $4 billion on share repurchases since January 2011. It’s likely that some of the cash from the CBS Outdoor transaction would be plowed into more buybacks.