In the wake of yesterday’s announcement that Finland’s Nokia plans to acquire digital mapping and navigation service provider Navteq for $8.1 billion, Dutch GPS device manufacturer TomTom has formally launched its $2.5 billion takeover offer for Tele Atlas.
TomTom originally announced the takeover plan last July, and re-iterated its offer of €21.25 per share in cash; however, Tele Atlas shares continued to trade above that level, buoyed after news of Nokia’s move to purchase Navteq—that means Tele Atlas investors may not be very tempted by TomTom’s below-market-value offer for their shares. TomTom says the tender period for Tele Atlas shares will open tomorrow, October 3, and run through December 4, 2007, and it plans to declare the offer unconditional if 80 percent of Tele Atlas shares are tendered.
Industry analysts agree TomTom may need to buddy-up with a digital map-making company in order to move from a pure hardware model to a business supported by mobile mapping and navigation services. However, they’re also quick to point out the relative size of TomTom and Tele Atlas may make the company a takeover target itself, particularly in the wake of Nokia’s $8.1 billion move into the industry.
