TomTom Rises as Rabo Foresees Move by Apple for Takeover
TomTom NV (TOM2), the Dutch supplier of navigation applications for Apple Inc. (AAPL)’s iPhone 5, rose the most in eight weeks after an analyst at Rabobank International said the U.S. company may make a takeover bid.
TomTom closed 5.65 percent higher at 4.06 euros in Amsterdam, the biggest jump since Oct. 15. The stock has gained 33 percent this year, valuing Amsterdam-based TomTom at 901 million euros ($1.17 billion).
There’s a 30 percent chance that Cupertino, California- based Apple will seek a purchase because the Dutch software maker has the capacity to make speedy changes to correct any mapping errors or create new functions, Hans Slob, an Utrecht, Netherlands-based analyst at Rabobank, said in today in a research report.
“TomTom needs the cash from Apple, and Apple needs the know-how of TomTom,” said Slob, who estimated Apple would pay a price of as much as 10 euros per share. A takeover is also a “royal way out” for the Dutch company’s founders, said Slob, who has a buy recommendation on TomTom and raised his share- price estimate by 38 percent to 5 euros.
Apple is under pressure to remedy its mapping software, which has been widely faulted for unreliable landmark searches, routes that get users lost and a lack of public-transit directions. TomTom Chief Executive Officer Harold Goddijn, one of the creators of the Dutch navigation-device company, said in October that it plans to remain independent, following analysts’ predictions that the founders may take it private with outside financing.
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