OBDC and OBDC II Scrap Merger, Focus Shifts to Independent Growth and Buybacks
Termination Reflects Cautious Strategy Amid Market Volatility
Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation II have decided to terminate their planned merger, opting instead to chart separate courses in light of current market volatility. Despite believing the merger could unlock long-term value, leadership from both boards agreed that the present market environment makes independent strategies the wiser choice for shareholders.
Share Repurchase and Tender Programs Signal Shareholder-Focused Approach
While the merger is off the table, both companies are doubling down on initiatives to enhance shareholder value. OBDC's previously announced $200 million share repurchase program remains active, providing continued support for the stock price. OBDC II, meanwhile, plans to reinstate its tender program in the first quarter of 2026, allowing investors an avenue to liquidate shares at fair value, subject to board approval.
| Program | Status | Details |
|---|---|---|
| OBDC Share Repurchase | Ongoing | $200 million program |
| OBDC II Tender | Expected Q1 2026 | Reinstated; historically fully satisfied each quarter |
Strong Fundamentals Underpin Both Companies’ Independent Performance
Both OBDC and OBDC II point to robust fundamentals as justification for pursuing independent growth. As of September 30, 2025, OBDC’s portfolio stood at $17.1 billion across 238 companies, while OBDC II managed $1.7 billion invested in 190 firms. OBDC II, in particular, boasts nearly 80% cumulative net return since its 2017 inception and an annualized net return of 9.3%—figures that comfortably outpace both broadly syndicated loan and high-yield indices. Notably, OBDC II has maintained a minimal loss rate of just 23 basis points, and current non-accruals make up less than 2% of its total portfolio value.
| Company | Total Portfolio Value | Portfolio Companies | Net Return (Cumulative) | Annualized Net Return | Loss Rate Since Inception | Non-Accrual Rate |
|---|---|---|---|---|---|---|
| OBDC | $17.1B | 238 | - | - | - | - |
| OBDC II | $1.7B | 190 | 80% | 9.3% | 0.23% | <2% |
Takeaway: Stability and Independent Growth in Focus
The decision to halt the merger marks a strategic pivot rather than a setback, with both OBDC and OBDC II expressing confidence in their ability to deliver returns on a standalone basis. Shareholders can expect ongoing buybacks and tender programs to help support value, and OBDC II’s long track record of outperformance adds another layer of reassurance. For investors, the primary message is clear: independent strength and disciplined management remain at the core of Blue Owl’s business development strategy—at least for now.
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