Takeover Candidates in Focus: Steyr Motors Jumps 20%, RE Royalties Draws Interest, and What About Evotec?

RE Royalties: A Takeover in the Coming Months?

At RE Royalties, investors can speculate on a takeover before the end of the year. Although the stock has already gained about 37% in 2026, management considers this insufficient. Consequently, the company has initiated a formal strategic review process. For several months now, a special committee of the board of directors has been examining various options for increasing the company's value over the long term. In addition to strategic partnerships, co-investments, and optimizing the capital structure, a complete sale of the company is also explicitly mentioned. PricewaterhouseCoopers Corporate Finance has also been retained as a financial advisor. Although RE Royalties emphasizes that this does not necessarily have to result in a transaction, the consideration of a sale is thus more than mere speculation.

For a potential buyer, the established platform would be particularly attractive. Since its founding, RE Royalties has invested approximately CAD 83 million across 27 transactions in about 135 renewable energy projects. The portfolio includes solar and wind farms, battery storage, hydropower, renewable natural gas, and energy efficiency projects across multiple regions, with more than 80% of the investments located in North America. Through long-term royalties and financing arrangements, the company generates recurring revenue without having to operate the facilities itself. At the same time, the model is scalable: new capital can be invested without a corresponding increase in operating costs. Additionally, approximately 40% of the portfolio comes from repeat clients, which speaks to established relationships with project developers and a sound investment selection process.

RE Royalties could therefore be of particular strategic interest to infrastructure investors, energy companies, or large asset managers from North America seeking to quickly secure a diversified portfolio in the growing renewable energy market. A financially strong owner could provide the company with more capital for further growth and thereby scale the platform.

https://youtu.be/5dQvcZkFR7E?si=jx0IeY-Wu7Cfqgm6

Steyr Motors: Analysts Remain Bullish

Steyr Motors initially sparked speculation on the stock market by announcing a potential takeover offer from Red Cat Holdings. According to the announcement, the US drone and robotics group had signaled preliminary, non-binding interest in a full takeover. At the same time, Steyr also stated that talks were no longer underway. Nevertheless, the stock jumped from EUR 32 to EUR 41 on Tuesday. Since then, the price has slipped back to EUR 35. What happens next?

According to NuWays, the withdrawn takeover attempt underscores Steyr Motors' strategic importance in the market for unmanned surface vehicles (USVs). The fact that a US drone and robotics company had considered a full takeover speaks to Steyr Motors' strong position as a hard-to-replace, business-critical supplier. Given Red Cat's high valuation and available liquidity, another takeover bid would be financially feasible in principle. Takeover speculation is therefore likely to continue supporting Steyr Motors' stock.

In the short term, however, NuWays remains cautious. Although the long-term order backlog stands at more than EUR 300 million, only EUR 37 million of that amount has been budgeted for 2026 so far. New orders for locomotives, the K2 main battle tank, or additional UPS projects have not materialized yet. Following the weak first quarter, this lack of order momentum is increasing uncertainty. NuWays anticipates delays rather than permanently canceled projects, but expects that any potential orders might arrive too late to make a significant contribution to 2026 revenue. Consequently, analysts are lowering their estimates to levels below the company's forecast. Due to operating leverage, the lower revenue is likely to have a disproportionately significant impact on profitability.

From NuWays' perspective, the investment thesis remains intact for the period after 2026. Opportunities include potential vehicle orders from the Spanish and Austrian defence ministries, further projects with KNDS, and the expansion of USV production at Red Cat. Red Cat's Blue Ops division plans to manufacture more than 1,000 USVs in 2027. Steyr Motors is currently the only named engine supplier for the V7 model. NuWays therefore reaffirms its "Buy" recommendation. The price target is reduced from EUR 60 to EUR 53 due to the weaker performance in 2026.

Evotec: Acquisition on the Horizon?

And what about Evotec, the perennial takeover target? The German biotech company has repeatedly been touted as a takeover target in recent years. Such speculation regularly led to sharp jumps in the share price. In the spring of 2024, "Bloomberg" reported that several private equity firms were reviewing the Hamburg-based biotech company and its drug pipeline. Things became particularly concrete in November 2024. Initially, the entry of private equity firm Triton as a new major shareholder sparked takeover speculation. A few days later, the US pharmaceutical company Halozyme even submitted a non-binding offer of EUR 11 per share, or approximately EUR 2 billion. Evotec's stock reacted positively. But then, after about a week, Halozyme withdrew its offer.

Currently, there is no trace of this takeover speculation. Instead, disillusionment prevails following the latest forecast revision. Evotec now expects revenue of only around EUR 570 to 610 million for 2026. Previously, the company had projected EUR 700 to 780 million. In terms of adjusted EBITDA, the company now anticipates a loss of between EUR 70 and 105 million instead of a profit of between EUR 0 and 40 million. Evotec cites lower contributions from existing and potential new partnerships, as well as delays, as the reasons. As a result, the focus for now is on operational issues, the high loss, and the lack of visibility. This appears to be deterring not only shareholders but also strategic buyers.

Evotec remains something of a black box, facing a range of operational challenges. This uncertainty appears to be deterring not only shareholders but also potential strategic buyers. By contrast, RE Royalties has established an attractive business model in the renewable energy sector. An acquirer could use the platform as a foundation for further expansion, accelerating growth with additional capital. Steyr Motors, meanwhile, occupies a compelling niche within the defence sector. Management's key challenge is to convert its substantial order backlog into sustainable revenue growth. If the company executes successfully, shareholders may ultimately conclude that remaining independent creates more value than a takeover.