Garmin Ltd. Secures Its Future (GRMN, NVT, NOK)

Garmin Ltd. (NASDAQ:GRMN) decided to take the steps that insure its future is secure.  The personal navigation device maker has signed a 6-year extension to the agreement with NAVTEQ (NYSE:NVT) (soon to be part of Nokia-NOK) for digital map data for location based solutions and vehicle navigation. The agreement allows Garmin to continue using NAVTEQ data through 2015, but this may really be a 10-year deal as Garmin has an option to renew for an additional 4-years.

Subsequently, Garmin has also announced today that in light of these developments it does not intend to pursue its offer for Tele Atlas N.V.  So now TomTom will win teh TeleAtlas bidding.  This new agreement makes that risk almost immaterial now.

24/7 Wall St. is momentarily about to release a new Special Situation Investing Newsletter with a stock pick in the GPS, PND, and UMPCs sector that we feel should be acquired in the coming weeks to months.  The hold period we are expecting does not look like it will be a long-term position and the entire trade has the ability to be hedged with options.  We have consulted with several industry and research professionals and it is surprising that a) Wall Street has overlooked this one and b) that the company hasn’t been taken out already.

We comment on other merger developments in multiple sectors and dealing with private equity on our open distribution list.  There we provide more general summaries and previews for our subscriber products covering buyouts, spin-offs, backdoor plays into IPO’s, reogranizations, and break-up values.

Garmin shares are up more than 20% pre-market and back above $100 on over 2 million shares.

Jon C. Ogg
November 16, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.