Alternative asset manager Blue Owl‘s fund said on Friday its board has unanimously recommended that shareholders reject an unsolicited minority tender offer from Cox Capital and Saba Capital.
The investment firms had offered to buy up to 8 million shares in Blue Owl Capital Corporation II (OBDC II) for roughly $30 million.
Here are the details of the offer and Blue Owl‘s response:
- Blue Owl said the offering price represents a discount of about 33.2% to net asset value, well below what its board believes is the long-term value of OBDC II shares.
- The investment firms behind the tender offer had said in February that it would provide a liquidity solution for retail investors following a significant industry-wide increase in BDC redemption requests.
- “Cox and Saba‘s offer price is inadequate, arbitrary and substantially undervalues OBDC II’s assets and ongoing access to liquidity,” it said.
- Last month, Blue Owl permanently removed an option for investors, mainly wealthy individuals, to withdraw some funds from OBDC II.
- Blue Owl later said it would return 30% of the net asset value of the fund to investors and stop quarterly redemptions.
- The alternative asset manager, which had more than $300 billion in assets as of December 31, said last month it would sell $1.4 billion of assets across three funds and return part of the proceeds to some investors, while also paying down debt.
- Blue Owl shares are down about 41% so far this year as investors grapple with worries that credit risk and AI disruption could hurt the software portfolios of private credit lenders.
- Executives have repeatedly said those fears are overblown.
