Garmin bids $3.3bn for map maker

Tom Tom relies upon Tele Atlas maps

Navigation device maker Garmin has made a 2.3bn-euro ($3.3bn; £1.6bn) offer for digital map provider Tele Atlas, trumping a bid from rival Tom Tom.

US-based Garmin is offering 24.50 euros for each Tele Atlas share, 15% higher than the 21.25 euros-per-share offer made by Tom Tom back in July.

Analysts said they expected Tom Tom to return with a fresh counterbid.

Both Tom Tom and Tele Atlas are based in the Netherlands, and Tele Atlas is Tom Tom's main map provider.

Bidding war

Garmin's move comes after Tele Atlas' only global competitor, US-based Navteq, agreed earlier this month to be bought by Finnish firm Nokia for $8.1bn.

"The bidding war has just started," said analysts at SNS Securities.

Petercam analyst Eric de Graaf said Tom Tom could not afford to lose out on buying its main supplier.

"The only logical conclusion can be that Tom Tom takes the next step and significantly raises its bid," he said.