Tele Atlas Bidding War Escalates
By Amy Gilroy -- TWICE, 11/7/2007
Amsterdam, The Netherlands — TomTom raised its bid for Tele Atlas by more then a billion dollars to $4.3 billion (2.9 billion euros), cranking up the bidding war between itself and Garmin to win ownership of the only remaining independent GPS electronics map maker.
TomTom also said it will acquire 25.8 million shares of Tele Atlas, representing a 28.3 percent stake in the company. Garmin owns 5 percent of Tele Atlas shares.
Analyst Peter Friedland of Soleil Equity Research said he expects “Garmin to come back with a higher bid, as we believe the same benefits of owning Tele Atlas apply to Garmin.”
A spokesman for Garmin said, “We’re reviewing the current offer on the table and our options, but at this point, we don’t have anything specific to report.”
The new bid tops Garmin’s earlier offer of $3.3 billion (2.3 billion euros) and has invited speculation that Garmin will come back with an even higher offer.
The bidding for Tele Atlas began in July when TomTom announced it intended to purchase Tele Atlas for 2 billion euros, and Nokia announced that it intended to purchase the only remaining map maker, Navteq, for $8.1 billion.
Maps are critical to the exploding personal navigation (PND) market because they account for up to 20 percent of the wholesale cost of a PND, said industry members, and because "maps are the key ingredient that makes these devices work," said Garmin.
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