Nokia Oyj is hoping that the bidding for its maps business known as HERE will go even higher, according to sources. Telecommunications equipment manufacturer Nokia is said to prefer Audi, BMW and Mercedes-Benz but there are still price differences.
Sources also said that Nokia continues to entertain offers so that the bidders will raise their offers. These automakers are key clients for this technology. They were first to approach Nokia about the sale but it’s possible that they will change their minds about paying the $4 billion that the Finnish company wants for HERE.
Final bids are due this week. HERE provides maps information for around 80% of cars that are equipped with in-dash navigation systems in North America and Europe. The insiders said that because these automakers are believed to be the preferred bidder, Apax Partners and other private-equity bidders have taken themselves out of the race.
Last month, it was reported that Baidu (which had previously partnered with Apax and Uber Technologies) may be joining the automakers and aid in the expansion of the mapping business in China. Baidu is the biggest search engine in China.
Nokia is hoping to sell the mapping unit as it turns its focus on mobile-network equipment. It has entered a deal to acquire Alcatel-Lucent in April, forming the biggest supplier in the world of this kind of equipment. This week at France's National Assembly, CEO Rajeev Suri said that there’s still a possibility that Nokia will choose not to sell HERE.
The potential valuation of up to $4 billion indicates that the value of Nokia's mapping assets has dropped significantly since 2008, when the company bought map provider Navteq for $8.1 billion.
Several companies are interested in this business, including a group composed of China's Tencent Holdings, NavInfo and Swedish buyout company EQT Partners, and three U.S. private-equity firms: Hellman & Friedman, Silver Lake Management and Thoma Bravo.
It is also believed that Microsoft is thinking of purchasing a minority stake. So far, Nokia has yet to comment on this report. The mentioned bidders have also opted to stay silent on this possible transaction.