The U.S. drone maker is offering €39 a share in cash for the Austrian engine maker, and a holder of about 15% of the stock is already locked in. The target scrapped its 2027 goals in August, and the bidder has not disclosed its funding.
Red Cat Holdings is making its second attempt to buy Steyr Motors, and this time the price is a large share of everything it has.
The proposed offer, announced before dawn on Monday and to be made through a Red Cat subsidiary, pays €39.00 in cash for every Steyr Motors AG share. Measured against Steyr's Oct. 16 close, that is a 28.9% premium; against the 30-day volume-weighted average it is 27.3%, and against the 52-week low 55.8%, according to Red Cat.
Red Cat starts with about 15% of Steyr effectively in hand: B&C Holding Österreich, the anchor holder, has signed an irrevocable undertaking. Julian Cassutti, Steyr's chief executive, plans to sell his own stake into the offer, and Rolf Wirtz, who chairs the supervisory board, said the board looks on the deal favorably pending review of the offer document. To succeed, Red Cat needs 50% of the shares plus one, along with clearances from regulators in four countries: Austria, Italy, Australia and the U.K. Shareholders are expected to have until Dec. 18 to accept.
"Fully financed" is how Red Cat characterizes the bid. Where the money comes from, it has not said.
The size of the cheque
On Steyr's share count of about 5.25 million, the offer values its equity at roughly €205 million, or about $230 million, by this publication's arithmetic. Red Cat had $325.6 million of cash at the end of June, after raising about $258.75 million before fees in a May share sale, and it used $78.7 million in operating activities in the first half of the year. The offer equals about 71% of that June cash balance and about 32% of Red Cat's market value of $721 million at Friday's close.
What Red Cat is buying
Steyr makes marine and military engines. Red Cat says pairing that technology and Steyr's European manufacturing base with its uncrewed surface vessel business strengthens its naval strategy.
Steyr's own outlook has deteriorated since the first approach. Delays in international defense projects forced a reset on Aug. 17. Steyr now guides to 2026 revenue of roughly €56 million to €61 million, where it had once pointed to €75 million to €95 million, and to an EBIT margin of 8% to 12% instead of 15% or more. Its 2027 ambitions, about €140 million of revenue and €40 million of EBIT, were scrapped altogether. In the first six months of the year the business took in €22.8 million, a touch less than in the same period of 2025, and adjusted EBIT came to just €0.1 million.
At €205 million, the equity value is about 3.4 to 3.7 times Steyr's guided 2026 revenue and about 35 times the EBIT implied by the midpoint of that guidance, by this publication's arithmetic.
The second attempt
Red Cat submitted a non-binding proposal earlier this year and withdrew it, announcing on July 28 that no definitive agreement had been signed. Steyr's management board said that evening that no further negotiations were taking place. Neither side has explained what brought them back to the table.
Red Cat's stock has fallen from $7.45 on July 28 to $4.72 on Friday, about 75% below its 52-week high of $18.78. Shares traded around $4.95 in thin pre-market dealing on Monday. In Frankfurt, Steyr stock jumped about 21% to €36.56. That leaves about 6.7% of upside to the €39 offer, a gap that suggests investors assign a reasonable chance to completion.
Market implications
One reading is that Red Cat is buying a strategic supplier at a sensible moment. Steyr's shares had been cut sharply from their high, its largest holder and management are on board, and its management board says demand is being delayed, not lost. Red Cat raised cash in May while its own stock was higher.
A second reading is that a cash-burning small company is committing most of its balance sheet to a business that just withdrew its growth targets, at about 35 times the EBIT implied by the midpoint of this year's guidance, without saying how it will fund the deal. If the financing involves new shares or debt, existing Red Cat holders bear that cost.
What to watch
Red Cat's first regular session on Monday; publication of the offer document, which should set out financing and conditions; any Red Cat filing on the deal; Steyr's formal board statement; and Red Cat's third-quarter cash balance. A share sale to fund the bid would settle the financing question in the most expensive way for current holders.