AMSTERDAM, Netherlands (AP) — Tele Atlas NV said it would endorse a euro2.9 billion (US$4.2 billion) takeover offer from personal device maker TomTom NV, which is engaged in a bidding war over the digital mapmaker with larger rival Garmin PLC.
The TomTom bid ''is more favorable to Tele Atlas, its shareholders and other stakeholders,'' Tele Atlas said in a statement.
That offer is for euro30 (US$43.90) per share, compared to Garmin's euro24.50 (US$35.85) per share offer. Tele Atlas shares are trading at euro31.75 (US$46.46), suggesting some investors believe Garmin will now rebid.
TomTom began the bidding for Tele Atlas in July, only to see Garmin respond last week.
The use of digital maps is booming, and the apparent worth of Tele Atlas increased sharply last month when Nokia Corp. announced a US$8.1 billion (euro5.7 billion) takeover bid for Navteq Corp. — the only digital mapping company other than Tele Atlas with global operations.
Although Cayman Island-based Garmin buys its maps primarily from Navteq, Garmin said it felt forced to challenge TomTom's bid for Tele Atlas to ensure that Navteq and Tele Atlas don't both fall into competitors' hands.
Den Bosch, Netherlands-based TomTom is Europe's largest maker of automotive navigation devices, while Garmin is larger in the U.S. and overall.
Garmin, Nokia and TomTom have all given assurances that they will continue to sell maps to all comers if they win their respective takeovers. But analysts say TomTom and Garmin are both worried they will be at a competitive disadvantage if they must buy maps from their direct competitor.
The basic logic for the device makers to buy the mapmakers is to allow close integration of maps into future mobile products. That would allow — for instance — features such as instantaneous map updates based on feedback from users stuck in traffic.