Blue Owl Capital Corporation: Merger Termination, OBDC II Wind-Down, and Sila Realty Trust Acquisition
Blue Owl has ended the quarterly tender offer program for Blue Owl Capital Corporation II (OBDC II), leaving shareholders of the non-traded BDC without a routine way to redeem their shares. The move followed the November 2025 termination of the fund’s proposed merger with its listed affiliate, Blue Owl Capital Corporation (NYSE: OBDC), and came as third-party firms circulated tender offers for Blue Owl fund shares at steep discounts to net asset value.
The White Law Group is investigating potential claims involving Blue Owl investments, including OBDC, OBDC II, Blue Owl Technology Income Corp. (OTIC), and Blue Owl Credit Income Corp. (OCIC). If you have suffered losses or are unable to access your funds, contact our FINRA arbitration attorneys for a free consultation.
Note that two different Blue Owl entities are in the news. Blue Owl Capital Corporation (OBDC) and OBDC II are business development companies managed by affiliates of Blue Owl Capital Inc. (NYSE: OWL), the alternative asset manager. It is Blue Owl Capital Inc.’s managed funds — not the BDCs — that completed the acquisition of Sila Realty Trust, discussed below.
Blue Owl Cancels OBDC–OBDC II Merger
On November 19, 2025, Blue Owl Capital Corporation and OBDC II announced the termination of their proposed stock-for-stock merger, citing current market conditions. The proposal had drawn investor objections: because OBDC’s shares were trading at a discount of roughly 20% to net asset value, OBDC II investors faced an immediate markdown on their investment if the exchange went through. Shareholder claims had earlier alleged inadequate disclosures related to the merger process, which the companies addressed through supplemental disclosures without admitting wrongdoing.
At the time of the termination, the companies stated that OBDC II planned to reinstate its quarterly tender program in the first quarter of 2026, subject to board approval. That reinstatement did not occur.
OBDC II Tender Offers Ended as Wind-Down Proceeds
Instead of reinstating tenders, OBDC II replaced its quarterly repurchase program — under which shareholders could previously redeem up to 5% of net asset value each quarter — with periodic capital distributions as part of a wind-down of the fund.
Blue Owl-affiliated BDCs reportedly agreed to sell approximately $1.4 billion in loan assets, with OBDC II accounting for roughly $600 million, or about 34% of its portfolio, spanning 128 portfolio companies across 27 industries. The sale reportedly priced at 99.7% of par value. Proceeds were designated to fund a return-of-capital distribution of up to $2.35 per share — approximately 30% of the fund’s NAV as of December 31, 2025 — expected by March 31, 2026.
OBDC II was launched in 2017 as a finite-life vehicle with an expected horizon of approximately ten years, and Blue Owl has characterized the wind-down as consistent with the fund’s design. For shareholders, however, the practical effect is that there is no longer any routine redemption option: investors must wait for wind-down distributions on the fund’s timetable, with no assurance as to the timing or amount of future payments. According to a February 2026 Morningstar analysis, the fund had not filed a quarterly report since September 2025, and Blue Owl was presumed to be continuing to collect incentive fees from OBDC II investors during the period in which redemptions were suspended.
Third-Party Tender Offers at Steep Discounts
In February 2026, firms including Saba Capital Management and Cox Capital Partners reportedly announced cash tender offers for shares of several Blue Owl non-traded BDCs, including OBDC II, Blue Owl Technology Income Corp. (OTIC), and Blue Owl Credit Income Corp. (OCIC), at discounts of approximately 20% to 35% below NAV.
Discounted third-party tender offers typically appear when a fund’s own redemption programs are limited or suspended, and they can signal how constrained investors’ exit options have become. Shareholders who accept these offers lock in a substantial haircut to the fund’s stated value; shareholders who decline may face a long wait with no assured liquidity.
Blue Owl Completes $2.4 Billion Acquisition of Sila Realty Trust
Separately, funds managed by Blue Owl Capital Inc. completed their acquisition of Sila Realty Trust, Inc., a net lease REIT focused on healthcare properties, on July 1, 2026. Sila stockholders approved the merger on June 26, 2026, with more than 98% of votes cast in favor, and received $30.38 per share in cash — a 19% premium to Sila’s closing price on April 17, 2026, the last trading day before the deal was announced, in a transaction valued at approximately $2.4 billion. Sila’s common stock has ceased trading and is being delisted from the New York Stock Exchange. Sila’s portfolio included 137 healthcare properties across 65 U.S. markets, primarily structured as long-term triple-net leases.
Risks of Non-Traded BDC Investments
Non-traded BDCs like OBDC II pool investor capital to lend to private companies. Like non-traded REITs, they are typically illiquid, complex, commission-heavy, and sensitive to economic downturns. Investors face the risk of loss of principal, liquidity restrictions and redemption gates, NAV volatility, high upfront fees, and conflicts of interest — and, as OBDC II shareholders have experienced, a fund’s redemption program can be reduced, suspended, or replaced entirely at the board’s discretion. Industry reports indicate the sector faces continued pressure from borrower leverage, declining asset quality, and reduced access to capital.
Broker Responsibilities and Potential Liability
Financial advisors recommending alternative investments like Blue Owl’s non-traded BDCs must conduct reasonable due diligence, ensure the recommendation is suitable for the investor, and fully disclose the risks, fees, and liquidity limitations under FINRA rules and SEC Regulation Best Interest. If an advisor represented that quarterly tender offers provided reliable access to invested capital, or sold these products to investors who needed liquidity, the brokerage firm may be liable for resulting losses.
Can Investors Recover Losses?
If you experienced losses in a Blue Owl investment or are unable to access your funds, you may be able to pursue financial recovery through FINRA arbitration. FINRA arbitration is typically faster and less expensive than court litigation, and firms can be held liable for unsuitable recommendations, misrepresentations, and failures to disclose redemption limits.
Related: The Non-Traded BDC Redemption Crisis
OBDC II’s wind-down comes amid unprecedented redemption pressure across the non-traded BDC sector. Apollo Debt Solutions, BCRED, and Blue Owl Technology Income Corp. have all capped quarterly withdrawals at 5% despite far greater demand from investors. For a sector-wide overview, see our post on non-traded BDC redemption suspensions and our coverage of the Blue Owl Technology Income Corp. investigation.
Free Consultation with a Securities Attorney
If you have concerns about your investment in Blue Owl Capital Corporation, OBDC II, or another non-traded BDC, the securities attorneys of The White Law Group may be able to help you. For a free consultation, please call (888) 637-5510 or contact us online.
The White Law Group is a national securities fraud and investor protection law firm with offices in Chicago, Illinois, and Seattle, Washington. Since 2010, the firm has handled over 800 FINRA arbitration cases involving investment fraud, negligence, and unsuitable recommendations.
Frequently Asked Questions (FAQs)
1. Why can’t I redeem my OBDC II shares?
OBDC II ended its quarterly tender offer program, under which shareholders could previously redeem up to 5% of NAV per quarter, and replaced it with periodic capital distributions as part of a wind-down of the fund. Shareholders must now wait for distributions on the fund’s timetable, beginning with a return-of-capital payment of up to $2.35 per share, roughly 30% of NAV, funded by asset sales.
2. What are the Saba and Cox tender offers for Blue Owl BDC shares?
Third-party firms including Saba Capital Management and Cox Capital Partners have reportedly offered to buy shares of OBDC II, OTIC, and OCIC at approximately 20% to 35% below net asset value. These offers provide immediate cash but require accepting a substantial discount to the fund’s stated value — a sign of how limited exit options for these investments have become.
3. Can I recover my Blue Owl investment losses?
Possibly. If your financial advisor misrepresented the liquidity of a Blue Owl non-traded BDC, failed to disclose its risks and fees, or recommended it despite being unsuitable for your circumstances, you may be able to recover losses through a FINRA arbitration claim against the brokerage firm that sold you the investment.
