Garmin locks on to Tele Atlas for $3.3B in superheated LBS space

Personal navigation device maker Garmin Ltd. said it will offer $3.3 billion for Tele Atlas N.V. in a move likely to spur a bidding war for the digital mapping company.
Tele Atlas in July accepted a bid of $2.8 billion from TomTom NV, a Dutch rival of Garmin, and Tele Atlas’s board had agreed to recommend the offer to shareholders. But the company said Wednesday it will review Garmin’s bid and inform the market as soon as reasonably possible.
The latest move comes a month after Nokia Corp.’s successful $8.1 billion bid for Navteq, a Tele Atlas rival and the only other comparable company on the field. Both firms provide data that serve as the foundation for in-dash navigation systems, Web-based applications and location-based mobile services.
Some analysts said Nokia had overspent for Navteq, but the move led many onlookers to speculate the acquisition would prompt Tele Atlas to raise its asking price. And other well-heeled firms may join the fight for Tele Atlas, the lone remaining sizable player on the market.
Companies such as Navteq and Tele Atlas “now occupy the most important position in the global GPS navigation supply chain,” iSuppli Corp. reported earlier this month. The market research firm said that while Garmin had been mentioned as a potential acquisition by Microsoft Corp., a more likely target would be TomTom-if their bid for Tele Atlas is successful. “This is because the key item in the supply chain is the map IP, rather than the navigation devices themselves,” the firm explained.
Shares of Garmin slid $7.48, or more than 7%, to $113 following the announcement.