Blue Owl Scraps Merger Of Funds Amid Market Uncertainty

• The Boards of both companies decided to terminate the previously announced merger.
• The merger agreement was announced on November 5. 
• OBDC II intends to resume its tender program in the first quarter of 2026. 

Blue Owl Capital Corp (OBDC) has officially called off the merger of its private credit funds with plans to reevaluate alternatives in the future. 

Blue Owl Capital Corporation (OBDC) is the larger publicly traded fund, while Blue Owl Capital Corporation II (OBDC II) is the smaller non-traded fund. The company stated that the decision reflects the Boards' commitment to acting in the best interests of shareholders and is based on management's recommendation due to current market conditions.

"While we continue to believe that combining OBDC and OBDC II could create meaningful long-term value for shareholders, we are no longer pursuing the merger at this point given current market conditions.”

-Craig W. Packer, CEO, OBDC and OBDC II. 

"Both funds remain strong, with excellent fundamentals, and we are confident in our ability to deliver attractive returns independently as we continue to work with the Board to consider the best future opportunities for OBDC II," he said.

Blue Owl Capital’s stock inched 0.5% higher on Wednesday morning. On Stocktwits, retail sentiment around the stock remained in ‘bullish’ territory amid ‘high’ message volume levels. 

Pushback From Investors 

According to a CNBC report, the proposed merger sparked backlash because OBDC II investors were prevented from redeeming their stakes until the deal was completed. 

Pending Board approval, OBDC II intends to resume its tender program in the first quarter of 2026. Since its 2017 launch, the fund has generated roughly 80% cumulative net returns and a 9.3% annualized net return, outperforming major high-yield and broadly syndicated loan benchmarks. 

Meanwhile, OBDC confirmed that its $200 million share buyback program, initially announced alongside the merger plan, remains active. 

OWL stock has declined 42% year to date. 

Also See: When Does Nvidia Report Q3 Earnings?

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