TomTom shareholders OK rights issue, shares soar

By Harro ten Wolde and Gilbert Kreijger

AMSTERDAM (Reuters) - TomTom (TOM2.AS) shareholders approved a 359 million euro ($503 million) rights issue at the Dutch navigation device maker, allaying concerns over its financial health and boosting its shares to an 8-month high.

TomTom said before the shareholder vote that it planned to price the issue, which will be used to reduce debt, at 4.21 euros per share.

TomTom shares were up 7.3 percent at 8.74 euros by 8:58 a.m. EDT, hitting an 8-month high and outperforming a 0.3 percent decline in the Amsterdam blue chip index .AEX.

"There are no worries anymore about bankruptcy. TomTom is again financially healthy and can focus on its operations. Investors have regained their confidence again," said Paul Beijsens, analyst at asset manager Theodoor Gilissen.

The issue price is a 36.5 percent discount to the theoretical ex-rights price, said TomTom, which makes portable navigation devices for cars and mapping software for handheld computers.

A trader said the issue price was attractive.

TomTom, struggling under a 1.16 billion euro debt from its purchase of Dutch digital map maker Tele Atlas for 2.9 billion euros last year, said it would offer shareholders the right to buy 5 new shares for every 8 shares held.

A total of 85.3 million new shares will be added to the 124.8 million shares outstanding, according to the latest data from May 25 from Dutch market regulator AFM.

TomTom, which competes with U.S.-based Garmin Ltd (GRMN.O), said two weeks ago it wanted to raise 430 million euros, made up of the rights issue and a private placement of 71 million, to reduce debt.

($1 = 0.7143 euro)

(editing by John Stonestreet)