TomTom bids for Tele Atlas

Shares of navigation device manufacturer TomTom N.V. shot skyward after the company said it will bid $2.5 billion to acquire Tele Atlas N.V., its main supplier of digital maps.
The Dutch firm said it will offer about $29.35 per share for Tele Atlas, which provides digital maps to application developers and device manufacturers for use on mobile phones, PCs, cars and in stand-alone devices. The move signals TomTom’s efforts to move beyond hardware into the world of location-based content and applications, which is expected to gain momentum as navigation offerings become more affordable for businesses and consumers.
TomTom’s offer is supported by Tele Atlas and marks a 32% premium over Tele Atlas’ average closing share price for the last three months, the companies said.
“We think that the navigation industry is going to change dramatically in the next few years,” said TomTom CEO Harold Goddijn, “as end customers will give ever-increasing importance to intelligent routing and continuously updated maps. By integrating customer feedback into the Tele Atlas map-manufacturing process, we will be able to considerably enhance the user experience and further increase all Tele Atlas and all TomTom’s customers’ satisfaction.”
Shares of TomTom jumped $4.52 per share, or 11%, to $45.50 on the news. Tele Atlas shares zoomed past the offer price, settling at $29.95 each by midday.