Tuesday December 4, 01:57 PM
TomTom EGM backs Tele Atlas buy; co to raise 457 mln eur via capital hike UPDATE
(Updates with CEO comments, adds details)
AMSTERDAM (Thomson Financial) - TomTom NV shareholders attending the company's EGM have voted to approve the company's planned acquisition of Tele Atlas (Amsterdam: TA.AS
- news) .
TomTom told journalists that a capital hike being implemented in conjunction with the takeover will comprise 8.16 mln new shares to be issued at 56 eur each, raising 457 mln eur.
The Dutch personal navigation systems flagged up the capital increase late yesterday, when it said it would raise up to 500 mln eur to refinance part of the financing commitments for the acquisition, and to reduce financial leverage.
Asked whether there was reluctance in the market concerning the offering, TomTom chief executive officer Harold Goddijn stressed that TomTom had wanted to obtain 'up to' 500 mln eur.
TomTom's share price slumped this morning amid concern its financial ratios will be pressured by the Tele Atlas dealm, but the CEO added: 'The decline is linked to the equity offering, not the (Tele Atlas) transaction.'
At the EGM, Goddijn was asked by a shareholder - who expressed concern about the bid price - to explain why TomTom raised its bid for Tele Atlas to 30 eur per share from the initial offer of 21.25 eur after Garmin (NASDAQ: GRMN - news) placed a rival bid for the Dutch digital map maker.
In reply, he said 'we've seen a big shift in industry dynamics since the bidding started', pointing to Nokia OYJ (Xetra: 870737 - news) 's acquisition of Navteq Corp (NYSE: NVT - news) and 'a huge increase in share prices ... and a re-rating of the industry'.
'Since we launched the offer (for Tele Atlas), we are increasingly confirmed in our thinking that the synergies are real and can improve the cost and quality of maps,' Goddijn said.
'We thought the best chance for TomTom to preserve shareholder value was to execute this deal. We've given it our best shot and we've done it.'
After the EGM ended, Goddijn also said he is confident the European Commission will approve the Tele Atlas deal.
The CEO said he thought the EU would have approved the deal in a phase I inquiry if Nokia had not bought Navteq, and added that the extension of the inquiry into phase II is intended mainly for the Commission to further familiarise itself with the market.
'There is already a duopoly in effect,' Goddijn said.
At 2.32 pm, TomTom's shares were down 9.46 pct to 56.75 eur, while the AEX (Amsterdam: news) was down 1.35 pct at 496.08 points.
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