Tele Atlas Accepts TomTom Offer
By Amy Gilroy -- TWICE, 11/8/2007
Amsterdam, The Netherlands — Tele Atlas accepted TomTom’s latest offer of $4.3 billion and recommended shareholders support TomTom’s bid over Garmin’s $3.3 billion offer, as the two leading GPS makers battle over the only remaining GPS map maker.
Tele Atlas’s management board said, “The revised [TomTom] offer is more favorable to Tele Atlas, its shareholders and other stakeholders than the Garmin proposal dated Oct. 31, 2007.”
Some industry members, however, including analyst Peter Friedland of Soleil Equity Research, expect Garmin to make a counter offer. Friedland anticipates that Garmin will “come back with a higher bid, as we believe the same benefits of owning Tele Atlas apply to Garmin,” he said.
A spokesman for Garmin said yesterday, “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 bidding for Tele Atlas began in July when TomTom announced it intended to purchase Tele Atlas for 2 billion euros, and Nokia followed in October with a bid to purchase the only remaining map maker, Navteq, for $8.1 billion U.S. dollars. Garmin then placed a counter bid for Tele Atlas late last month.
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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