Shares of Garmin Ltd. (NASDAQ: GRMN) have been struggling lately as the company has been involved in a bidding war for Dutch digital mapmaker Tele Atlas NV. That has all changed this morning with the news that Garmin has pulled out of the bidding for Tele Atlas and instead signed a deal with Navteq Corp. (NYSE: NVT) for mapping services through the year 2015.The stock has been soaring in premarket trading, up over 20% on this morning's news. Wall Street has been pretty tough on Garmin lately as investors worried about where the company would get its mapping services. Earlier this year, Nokia Corp. (NYSE: NOK) made an $8.1 billion bid for Navteq, and concerns mounted that Garmin would be unable to continue to get its mapping needs from the company.
After the Nokia offer for Navteq, Garmin had entered into a bidding war to acquire the only other major mapping provider, Tele Atlas, the other bidder being TomTom NV. TomTom has recently upped the ante for Tele Atlas to $4.2 billion, which was well above what Garmin was willing to pay for the company.
Today's announcement comes as great news to Garmin investors and the stock will be rewarded nicely in today's market.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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