TomTom also said that, “immediately subsequent to this announcement TomTom N.V. will purchase and acquire approximately 25.8 million ordinary shares of Tele Atlas N.V., representing approximately 28.3 percent of Tele Atlas N.V.'s issued share capital.”
The aggregate value of the proposed transaction is approximately €2.9 billion (€2.7 billion, including the net financial cash position of Tele Atlas; this implies a multiple of approximately 41 times the projected 2007 adjusted EBITDA for Tele Atlas). Goldman Sachs International ABN AMRO Bank N.V. and Rabobank are providing committed financing for the acquisition, said TomTom.
The question today is to know whether Garmin wants to continue this bidding war or let TomTom go with Tele Atlas. At this stage it would not be a complete loss for Garmin: having its competitor spending 41% more on this acquisition is also some kind of victory. As we mentioned in a previous article (read here) Garmin and Tele Atlas are probably not the best fit. Additionally, should Garmin win this bidding war, it may have to contend with a company in which TomTom has a significant shareholder stake and is a major customer.