Garmin Trumps TomTom Bid for Tele Atlas
Digital device maker Garmin started a bidding war for Dutch digital map provider Tele Atlas on Wednesday with an unsolicited 2.3 billion euros ($3.3 billion) offer, trumping an agreed offer from TomTom.
Garmin's offer is 24.50 euros for each share of Tele Atlas, 15 percent higher than TomTom's offer of 21.25 euros per share, announced in July. TomTom's offer values Tele Atlas at 1.8 billion euros.
Garmin is planning to launch its offer by Dec. 4, the scheduled expiry date for TomTom's offer for Tele Atlas, and has secured financing commitments, it said in a statement.
The U.S. navigation device maker said its offer will be conditional on at least 66.67 percent of shares being tendered.
Tele Atlas shares jumped 11.5 percent, well above Garmin's offer price, to 26.80 euros in early trade in Amsterdam, while TomTom shares slumped 11.9 percent to 59.80 euros by 0815 GMT.
TomTom and Tele Atlas were not immediately available to comment.
Tele Atlas shares have been rising in anticipation of a counter-bid after U.S.-based Navteq, Tele Atlas's main competitor, agreed this month to an $8.1 billion takeover by cellphone maker Nokia.
"A combined company will expand Garmin's ability to serve more customers in wireless, in-dash automotive, internet, and enterprise markets by offering a broad range of solutions including content, applications, and devices," Garmin said in a statement.
As TomTom before it, Garmin promised to run Tele Atlas as an independent business and give competitors non-discriminatory access to Tele Atlas maps.
Garmin also reported third-quarter earnings on Wednesday, showing a profit rise and raising guidance.