Australian Traffic Network owner GTN’s takeover to end this week

An ‘undervalued’ takeover offer for traffic report company GTN is to close on Wednesday but the chairman and independent directors want urged shareholders to reject the $91m bid.

The company that operates Australian Traffic Network has new majority owners. Picture: Nigel Hallett

The chairman and independent directors of media company GTN have urged shareholders to reject a $91m takeover bid due to close this week.

ASX-listed GTN, the biggest supplier of traffic information reports for radio stations in Australia, Britain, Brazil and Canada, has been facing a 46.5c per share offer by investment management company Viburnum Funds, which so far owns more than 67 per cent of its target.

Viburnum was already GTN’s biggest shareholder when it launched its unconditional cash offer in September and earlier this month it extended the deadline to November 20.

GTN chairman Peter Tonagh said he and GTN’s independent directors continued to urge shareholders to reject Viburnum’s bid.

“I, as the chairman, and my other directors, we’ve all said that we maintain our intention to reject the offer and just stick with it because we believe in the value,” he said.

GTN independent chairman Peter Tonagh. Picture John Feder

“Our independent expert’s report says it’s worth about double what is being paid for it.”

The bid price is below where GTN shares were trading in January, and half the estimated fair value of 85c to 95c contained in GTN’s independent expert’s report, which concluded the offer was “neither fair nor reasonable”.

Viburnum describes itself as an “active ownership investment manager” and its co-founder, Craig Coleman, is a GTN director. GTN’s Australian Traffic Network and overseas businesses provide radio affiliates with money and traffic reports in exchange for 10-second advertising spots adjacent to the reports. The spots are bundled together and sold to advertisers.

Mr Tonagh is deputy chair of the ABC and is a former CEO of Foxtel, REA Group and News Corp Australia (publisher of The Australian).

He said some shareholders might accept the bid because Viburnum’s bigger stake reduced liquidity in the stock “so they will elect to sell into the bid just to make sure they can exit”.

Viburnum had stated its intention to maintain Mr Tonagh and the existing management team.

“That’s obviously up to me to decide if I want to stay,” he said.

In August GTN announced it had more than doubled its annual net profit to $5.7m, on revenue of $184.2m, up 4 per cent.

Mr Tonagh said at the time that the business was resetting for the future “with a new executive team, a lower overhead cost base and an extension of some key affiliate agreements”.

Originally published as Australian Traffic Network owner GTN’s takeover to end this week