NEW YORK - Huture Ltd., a Chinese hydrogen-powered vehicle manufacturer, and Aquaron Acquisition Corp. (Nasdaq: AQU), a special purpose acquisition company, have announced a definitive merger agreement. The combined entity, to be named Huture Group Limited and incorporated in the Cayman Islands, will be listed on the Nasdaq Stock Market. The transaction values the new entity at approximately $1 billion.
Huture, established in 2020, specializes in the research, development, manufacture, and sale of hydrogen-powered vehicles. Its subsidiary, Huture Motors (Shanghai) Co., Ltd., operates a manufacturing facility in Shanghai aimed at expanding R&D and production capabilities for sustainable transportation solutions.
Mr. Weishan Chen, Huture's founder and chairman, expressed optimism about the merger facilitating growth and market expansion. Ms. Yi Zhou, CEO of Aquaron, highlighted Huture's leadership in China's hydrogen fuel-cell industry and its potential to revolutionize hydrogen energy and decarbonize economies.
The proposed transaction is structured at $10.00 per share, with Huture's current shareholders retaining majority ownership post-merger and also designating the board of directors for the combined entity. The proceeds are expected to support working capital and general corporate purposes.
Both companies' boards have approved the merger, which is subject to shareholder approval, regulatory clearances, and other customary conditions, including the effectiveness of a registration statement by the new holding entity and approval of its Nasdaq listing application.
Legal counsel for the transaction includes Pillsbury Winthrop Shaw Pittman LLP, Commerce & Finance Law Offices, and Ogier for Huture, and Wilson Sonsini Goodrich & Rosati, P.C., and Jingtian & Gongcheng for Aquaron. Arbor Lake Investment Limited is advising Aquaron.
The merger's completion is anticipated later this year, as detailed in a Current Report on Form 8-K to be filed by Aquaron with the SEC.
This news is based on a press release statement.
In other recent news, Aquaron Acquisition Corp. faced a compliance issue with the Nasdaq Stock Market due to a delay in filing its annual report. The company received a deficiency notice, which is not an indication of imminent delisting but serves as a formal warning. Aquaron Acquisition has been given 60 days to submit a plan to regain compliance with Nasdaq's listing requirements.
If the plan is accepted, Nasdaq may grant an extension of up to 180 days for the company to file the overdue report and regain compliance. However, if Aquaron Acquisition fails to comply within the given timeframe, the company's stock may be at risk of delisting.
Nevertheless, Aquaron Acquisition has expressed its intent to file the required Form 10-K as soon as the financial statements for the year ended December 31, 2023, are prepared and reviewed. These developments are part of the company's recent activities.
InvestingPro Insights
In the wake of the merger announcement between Huture Ltd. and Aquaron Acquisition Corp., investors are closely monitoring the financial metrics and market performance of Aquaron (Nasdaq: AQU). According to the latest data from InvestingPro, Aquaron is currently trading at a P/E ratio of 72.56, which adjusts to a lower 56.71 when considering the last twelve months as of Q4 2023.
This suggests that while the company is trading at a high earnings multiple, it may be at a low P/E ratio relative to its near-term earnings growth potential. An InvestingPro Tip highlights this aspect, indicating that the stock could be appealing for investors looking for growth opportunities.
Furthermore, Aquaron's stock has been experiencing low price volatility, an attractive trait for investors who prefer stability. Despite this, the company's gross profit margins have been weak, which is a concern that potential investors should take into account. On a positive note, Aquaron's liquid assets exceed its short-term obligations, which is reassuring for those concerned about the company's liquidity and short-term financial health. Additionally, the stock is trading near its 52-week low, which might offer a favorable entry point for investors.
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