Navigation devices maker Garmin spooked investors Wednesday with an unsolicited 2.3 billion euro ($3.3 billion) bid for Tele Atlas, the Dutch mapping company, currently considering an offer from rival device maker TomTom.
Garmin said it will offer $35.31 for a share of Tele Altas, 15% higher than the $30.63 TomTom offered in July and a 48% premium to Tele Atlas’ share price before TomTom’s bid.
Garmin said it expects a counter-bid from its Netherlands-based rival TomTom.
Reik Read, an analyst with Robert W. Baird, took a dim view of the bid because of the possibility of a “bidding war as TomTom and Garmin have similar purchasing capability”.
Garmin’s aggressive move comes nearly a month after cell phones maker Nokia offered to buy digital mapmaker Navteq for $8.1 billion. Nokia’s acquisition is expected to close in first quarter fiscal 2008.
ABI Research says annual sales of GPS-enabled devices will climb from $15 billion annually to $22 billion by 2008. Web sites like Amazon A-9, Yahoo and Google are making digital maps a part of their strategy.
Tele Atlas and its chief rival Navteq have essentially a duopoly in mapping data, explains Newsweek.
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