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Garmin Makes Bid for Tele Atlas

Posted on: Wednesday, 31 October 2007, 09:00 CDT

By TOBY STERLING

AMSTERDAM, Netherlands - Garmin Ltd., the world's largest maker of personal navigation devices, unveiled an unsolicited 2.3 billion euros ($3.3 billion) takeover offer for Dutch digital mapmaker Tele Atlas NV on Wednesday, topping an offer by rival TomTom NV by 15 percent.

Tele Atlas, which had endorsed the TomTom bid, said it was now reviewing its options. A TomTom spokesman declined to comment while the company studies the 24.50 euros ($35.31) per share Garmin bid.

TomTom shares plunged 12 percent to 59.90 euros ($86.33), while Tele Atlas shares rose 14 percent to 27.30 euros ($39.34) - signaling that some investors are speculating the bidding will go higher still.

TomTom, which is based in Amsterdam, is Europe's largest maker of navigation devices, but the Cayman Islands-based Garmin is larger in the U.S. and overall.

TomTom began a rush to consolidate the high-growth digital mapping industry when it said it would buy Tele Atlas for 21.25 euros ($30.63) per share in July.

On Oct. 1, mobile phone maker Nokia Corp. announced an $8.1 billion bid for the only other global digital mapmaker, Navteq Corp.

Both TomTom and Nokia plan to tightly integrate the maps into the design of their navigation devices and phones, and Garmin's shares tumbled as investors feared the company would be forced to make a counteroffer or risk being left without a partner.

However, both Nokia and TomTom gave assurances that they would continue to sell maps to all comers after the respective takeovers.

"Given the high growth and rapid change the navigation market has undergone to date, we feel that now is the right time for Garmin to move ahead with this proposed combination with Tele Atlas," Garmin Chief Executive Min Kao said in a statement.

He said that Garmin's larger size meant its offer would allow Tele Atlas more opportunity for growth.

"We also intend to make Tele Atlas' content available to the entire navigation market on a nondiscriminatory basis, promoting healthy competition, with significant benefits to the navigation market and all its consumers," Kao said.

Source: Associated Press/AP Online

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