Red Cat offers €39 a share for Austrian engine maker Steyr Motors, months after abandoning talks

Red Cat Holdings, the U.S. maker of military drones and robotic boats, offered on Monday, Oct. 19, to buy Austrian engine specialist Steyr Motors for €39 a share in cash, about €205 million in total, less than three months after it withdrew an earlier proposal. Steyr Motors' largest shareholder has already agreed to sell its stake.

The terms

Red Cat will make the offer through SMOT Acquisition, a wholly owned subsidiary based in Vienna. The €39 price is 28.9% above Steyr Motors' Xetra close of €30.26 on Friday, Oct. 16, 27.3% above its 30-day volume-weighted average and 55.8% above its 52-week low. With 5,251,261 shares outstanding, the offer values the Austrian company at about €204.8 million, or roughly $230 million.

The offer needs acceptances for at least 50% of the shares plus one, along with foreign-investment approvals in Austria, Italy, Australia and the U.K. Red Cat expects the acceptance period to start shortly after the offer document is published and to close at 5 p.m. CET on Dec. 18. It is aiming to complete the deal in the first half of 2027. Red Cat describes the offer as fully financed but did not say how it will pay for it.

Who is already on board

B&C Holding Österreich, Steyr Motors' biggest shareholder with about 15%, has signed an irrevocable undertaking to tender all its shares. B&C backed Steyr Motors' 2024 stock-market listing as a cornerstone investor and said the sale fits its strategy of aligning portfolio companies' ownership with their strategic needs. Chief Executive Julian Cassutti said he would tender his own shares and called the cash offer "a chance to realize their investment in cash today" for shareholders.

That still leaves Red Cat needing roughly another 35% of the company from a shareholder base that is otherwise free float. Steyr Motors' management and supervisory boards have not yet issued their formal recommendation. Supervisory board chairman Rolf Wirtz said the board views the deal favorably, subject to reviewing the terms in the offer document, and the company said it intends to publish a supporting statement once it has done so.

A second attempt

This is not the companies' first try. On July 28, Steyr Motors confirmed market rumors that it had been negotiating a business combination agreement with Red Cat, and said those talks had stopped. The same day, Red Cat said it had withdrawn a preliminary, non-binding proposal. Monday's announcement said the talks later resumed.

The logic is maritime. Red Cat, a Salt Lake City maker of military drones and robotic systems, is building uncrewed surface vessels through its Blue Ops division, and its Variant 7 boat is powered by a Steyr engine, according to a May release announcing full-rate production. In August, Blue Ops added a Volvo Penta engine as another propulsion option. Steyr Motors builds compact, high-output engines for military vehicles, military and civilian boats and auxiliary power units for main battle tanks and locomotives. Red Cat said it would keep Steyr Motors' headquarters, manufacturing and research in Austria and continue serving its existing customers, and Steyr Motors said existing jobs are to be safeguarded.

Why the price looks modest

The offer arrives after a weak stretch for the Austrian company. In the first half of 2026, Steyr Motors' revenue was flat at €22.8 million. Its EBIT, or earnings before interest and taxes, was a loss of €1.06 million after about €1.1 million of one-off costs, compared with EBIT of €3.4 million a year earlier. Excluding those costs, adjusted EBIT was €100,000. It blamed slower defense orders, which pushed about €10 million of expected revenue into later periods, and cut its full-year outlook to revenue growth of 15% to 25% with an EBIT margin of 8% to 12%. It also said its 2027 targets would not be reached on the original timetable, even as it reported an order backlog of €310 million running to 2030.

At €39, the bid is below the stock's 52-week high of €52.80 and below the €50 to €62 price targets of the four analysts listed in Steyr Motors' half-year report, whose average was €56.50 at the end of June. Steyr Motors is due to report third-quarter figures on Oct. 22.

How the shares reacted

Steyr Motors shares traded at €36.78 on Xetra at 2:11 p.m. in Frankfurt, or 8:11 a.m. ET, up about 21.5% on the day and still about 6% below the offer price, a gap that suggests investors are pricing in the time and approvals still needed. Red Cat shares were at $5.07 in premarket trading at 8:25 a.m. ET, up about 7% from Friday's close of $4.72.