Blue Owl Capital Corp II Board Rejects Below-NAV Tender Offer From Saba Capital, Cox Capital
The board of directors of Blue Owl Capital Corporation II has formally recommended that shareholders reject an unsolicited tender offer from Saba Capital Management and Cox Capital Partners, calling the bid inadequate and arguing it would deprive investors of a near-term capital distribution and future portfolio returns. OBDC II is a non-traded business development company focused on lending to U.S. middle-market companies.
The offer targets up to 8 million shares, representing less than 7% of the company’s outstanding stock. The rejection follows a review by the board and its financial advisers.
Discount to Net Asset Value
The central basis for the board’s rejection is the offer price of $3.80 per share, which the company says represents a 33.2% discount to OBDC II’s implied net asset value of $5.69 per share as of Feb. 24, 2026.
The company said that this NAV calculation already accounts for a $2.50 per share “return of capital distribution” scheduled to be paid by March 31, 2026, to shareholders of record as of March 24. That figure is an increase from the $2.35 per share that AltsWire previously reported. The board argued that the tender offer is designed to strip shareholders of this upcoming cash payment and future distributions.
To support its position, OBDC II retained BofA Securities Inc., which rendered a fairness opinion stating that the $3.80 per share consideration is inadequate from a financial point of view.
The company said it is already executing a plan to return capital to investors, with total payments expected to equal 50% or more of net assets in 2026. Following the special distribution, OBDC II said it intends to prioritize additional quarterly capital returns of 5% or more, alongside regular monthly dividends. The company said OBDC II has delivered a 9.1% annualized return since inception, which it said has consistently outperformed leveraged loan indices.
The board confirmed that no executive officers or affiliates of the company intend to tender their own shares in the Saba-Cox offer. Tendering, the board warned, would mean forfeiting rights to future appreciation from what the company described as a high-performing portfolio.
Shareholders are not required to take any action in response to the board’s recommendation.
The capital return plan follows a previously announced asset sale in February. OBDC II said the BDC will remain diversified with adequate liquidity, holding approximately $447 million in cash and undrawn debt capacity and carrying a net debt-to-equity ratio of 0.52x.
As of the end of 2025, OBDC II’s portfolio included investments in 183 middle-market companies with an aggregate fair value of $1.6 billion. The fund is externally managed by Blue Owl Credit Advisors LLC.
Separately, Saba Capital and Cox Capital have also launched a joint tender offer for shares of Starwood Real Estate Income Trust, a publicly registered non-traded real estate investment trust sponsored by Starwood Capital Group. SREIT has significantly restricted redemptions over the past two years.
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