Is the TeleAtlas Bidding Just Getting Going?

TeleAtlas is one of two companies in the world that has the entire world mapped out. The other is Navteq. While Navteq may have a little more information in their databases, the conventional wisdom is that these two companies are roughly equivalent. TeleAtlas is a Dutch company and agreed several months ago to be acquired by TomTom, also based in the Netherlands, which is one of the most innovative maker of personal navigation devices in the world, but principally focused on Europe and other GSM markets. The original acquisition price was around $2 billion; then, Nokia stepped up and agreed to acquire Navteq for $8.1 billion.

Garmin, the US manufacturer, and until now a Navteq customer, pondered the situation before deciding to bid $3.3 billion for TeleAtlas last week, announcing that they couldn't allow both Navteq and TeleAtlas to fall into competitors' hands. Today came news of a counterbid by TomTom for $4.2 billion.

Given that Navteq was acquired by Nokia for $8.1 billion and that TomTom and Garmin have both decided that TeleAtlas is indespensible to their businesses and cannot easily be replicated at a reasonable cost and time, it seems that even at $4.2 billion the price can go much higher.

Garmin has a deep balance sheet and can easily bid over $5 billion.

Conventional wisdom is that a $5 billion bid by Garmin would be a knock-out for TomTom. Given TomTom's willingness to go to $4.2 billion, that is not so certain.

Given the price tag for Navteq and the fact that both companies view TeleAtlas as so vital in a world where Nokia ownes Navteq, this could easily get out of hand.

Plus, there may be wild cards waiting in the wings here that could crack this bidding wide open. One is Motorola. Another is Vodafone. And, a final one is, well, Google.