Mapping the future

1 November 2007 By Una Galani Follow @ugalani

The bidding war between TomTom and Garmin for digital map provider Tele Atlas has sunk both suitors’ shares by more than the total price they are expected to pay. That’s not as illogical as it first seems. Because of the industry’s dynamics, both winner and loser will get hurt.

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Digital map provider Tele Atlas has given navigation device maker TomTom five days to raise its agreed bid for the company, after receiving a higher E2.2bn offer from TomTom's main competitor, USbased Garmin.

Garmin is offering E24.50 per a share for Tele Atlas, equivalent to a 15% premium to TomTom's offer and a 43% premium to the prebid share price.

Tele Atlas is one of the two leading digital map providers, competing with US based Navteq Corp, the main map provider for Garmin. Last month, Navteq agreed to an $8.1bn takeover by Finnish mobile phone maker Nokia.

TomTom and Garmin shares are both down roughly 13% in the week on fears of a bidding war for Tele Atlas. Tele Atlas shares climbed 4.8% to E28.90.

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