Blue Owl Capital Corporation Merger Terminated & Third Party Tender Offer

Blue Owl Capital Merger Terminated & Tender Offer Update (2026)
Blue Owl Capital Investment Investigation Update

Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation II (OBDC II) have officially terminated their previously proposed stock-for-stock merger, “citing current market conditions.” The decision follows earlier supplemental disclosures made in response to shareholder concerns regarding the transaction.

Now, new developments in February 2026 may significantly impact investors — including third-party tender offers at steep discounts to NAV and major portfolio asset sales.

Blue Owl Cancels OBDC–OBDC II Merger

Although management previously stated that combining the BDCs could create long-term shareholder value, both boards elected not to proceed.

Key Updates:

• The OBDC–OBDC II merger has been formally terminated

• OBDC II previously announced plans to reinstate its quarterly tender program in Q1 2026 (pending approval)

• Funds will continue operating independently

Earlier in 2024, shareholder claims alleged inadequate or misleading disclosures related to the merger process. While wrongdoing was denied, supplemental disclosures were issued.

Related prior developments included:

• A $0.52 special dividend declared by Blue Owl Capital Corporation III (OBDE)

• Additional information regarding OBDC’s special committee and financial analyses

With the merger abandoned, investors are left navigating liquidity concerns and broader BDC market stress.

February 2026 Update: Saba & Cox Capital Tender Offers

In a significant new development, Saba Capital Management and Cox Capital Partners announced plans to launch cash tender offers for shares of several Blue Owl non-traded BDCs, including:

• OBDC II

• Blue Owl Technology Income Corp. (OTIC)

• Blue Owl Credit Income Corp. (OCIC)

What Investors Should Know:

• Tender prices are expected to be 20%–35% below the most recent NAV or DRIP price

• Purchases will be cash only

• Offers follow required 10-business-day notice periods

• Designed to provide liquidity amid redemption restrictions

These tender offers come as the BDC industry faces:

• Increased redemption requests

• Multiple quarters of net outflows

• Expanded use of redemption gates limiting withdrawals

$1.4 Billion Loan Sale & 30% NAV Distribution

Separately, Blue Owl BDC vehicles agreed to sell $1.4 billion in direct lending investments to North American pension and insurance investors at 99.7% of par value, aligning closely with internal valuation marks.

OBDC II is selling approximately $600 million in loans (34% of its portfolio).

The board intends to use the proceeds to fund a return-of-capital distribution of up to $2.35 per share, representing roughly 30% of NAV as of December 31, 2025, expected by March 31, 2026 (pending approval).

However, reports indicate that one fund may permanently replace its quarterly redemption program with structured capital distributions — raising additional liquidity questions for long-term investors.

Industry Concerns: Higher Rates & BDC Risks

Reports from BlueVault and Fitch indicate that non-traded BDCs continue to face pressure from:

• Rising interest rates

• Increasing borrower leverage

• Declining asset quality

• Slower access to capital for middle-market companies

BDCs often invest in private equity-backed companies that may be vulnerable in tightening credit environments. Like non-traded REITs, non-traded BDCs are typically:

• Illiquid

• Complex

• Commission-heavy

• Sensitive to economic downturns

Risks of Investing in Non-Traded BDCs

Investors should carefully consider:

• Loss of principal

• Interest-rate risk

• Liquidity restrictions & redemption gates

• NAV volatility

• High upfront commissions

• Conflicts of interest in fee structures

Discounted secondary tender offers — such as those proposed at 20–35% below NAV — may highlight the limited exit options available to investors.

Broker Due Diligence Obligations

Broker-dealers recommending Blue Owl BDCs must:

• Conduct reasonable due diligence

• Ensure recommendations are suitable based on investor profile

• Disclose material risks, fees, liquidity limits, and conflicts

Failure to meet these obligations may give rise to liability through a FINRA arbitration claim.

Can Investors Recover Losses?

The White Law Group is investigating potential claims involving:

• Blue Owl Capital (OBDC, OBDC II, OBDE, OTIC, OCIC)

• Non-traded BDC liquidity events

• Unsuitable recommendations

• Failure to disclose redemption restrictions

• High-commission alternative investments

If your financial advisor recommended Blue Owl BDCs and you are now facing losses, liquidity restrictions, or discounted tender offers, you may be eligible to pursue recovery through FINRA arbitration.

About The White Law Group

The White Law Group, LLC is a national securities arbitration law firm with offices in Chicago, Illinois and Seattle, Washington. The firm has represented investors in more than 800 FINRA arbitration cases nationwide.

For a free consultation, call 1-888-637-5510.

Frequently Asked Questions (FAQs)

1. Why was the Blue Owl merger canceled?

The companies stated that “current market conditions” led to termination of the proposed stock-for-stock merger between OBDC and OBDC II.

2. What are the Saba and Cox tender offers?

Saba Capital Management and Cox Capital Partners have announced plans to launch cash tender offers for certain Blue Owl non-traded BDC shares at an expected 20–35% discount to NAV.

3. What is the 30% NAV distribution from OBDC II?

OBDC II intends to distribute up to $2.35 per share (approximately 30% of NAV as of December 31, 2025) following the sale of $600 million in loans.

4. Can I recover losses through FINRA arbitration?

Possibly. If your advisor misrepresented the risks, failed to disclose liquidity limits, or recommended the investment unsuitably, you may have a viable FINRA arbitration claim.