(Adds options activity)
NEW YORK, Oct 1 (Reuters) - Shares of Garmin Ltd (GRMN.O), the world’s largest maker of navigation devices, fell more than 10 percent on Monday after Nokia NOK1V.HE offered to buy digital map supplier Navteq NVT.N.
Analysts had speculated that Garmin, whose devices are enabled by global positioning system (GPS) technology, might buy Navteq, its main map supplier.
That speculation came after Garmin’s Dutch rival, TomTom (TOM2.AS), said it would buy map supplier Tele Atlas TA.AS to hold on to its position in Europe and grab a bigger slice of the U.S. market.
Garmin shares fell to a low of $102.00 on the Nasdaq, from Friday’s close of $119.40, on news of the Nokia offer, which would give the world’s top cell phone maker a stronghold in the navigation business.
Nokia said it would offer $8.1 billion for Navteq, which provides the digital maps and software used by mobile phones, navigation systems and technologies.
Navteq shares fell $1.59, or 2 percent, to $76.36, suggesting that many investors do not expect a counter bid to top the Nokia offer of $78 per share.
But Navteq’s call options, allowing investors to buy its shares at $80 by mid-January, were active on Monday, and one analyst said it could mean investors were not ruling out a rival offer by Garmin.
“Some of the activity might be based on the idea that Garmin is now interested in making a bid for the company,” said Frederic Ruffy, options analyst at options education firm Optionetics in California.
In afternoon trading, the Navteq January $80 calls had volume of 14,292 contracts and cost $1.25 a contract, down $6.85 as Navteq shares dropped.
Garmin shares were down $12.15 to $107.25.
“Shares fell on concerns that Garmin might lose some of its leverage in negotiating prices with Navteq, which is Garmin’s most important supplier of maps,” Ruffy said. “As a result, some are speculating that, in order to preserve its existing relationship, there is now a chance that Garmin might make a higher bid for Navteq.” (Reporting by Franklin Paul in New York and Doris Frankel in Chicago)