Golub Sues Dyal to Block Merger With Lending Rival Owl Rock

Golub Capital has opened up a new front in the legal battle against Dyal Capital’s merger with Owl Rock, as opposition stiffens to the deal that would create a new investing heavyweight.

Golub, a $35 billion credit specialist, is asking a judge to block the transaction that would result in part-owner Dyal merging with an arch rival in the direct-lending market to form Blue Owl. The move pits Dyal in a second court battle just days after being sued by Sixth Street Partners, a $50 billion investment firm.

In both cases, Dyal is being attacked by firms where it holds a valuable ownership slice. The Neuberger Berman subsidiary bought a piece of Golub in 2018 for about $1 billion, according to people with knowledge of the matter.

“Golub’s complaint misrepresents their contract with Dyal specifically and the Blue Owl transaction generally, claims rights that do not exist, contains numerous misstatements of fact and is procedurally improper, among other issues,” David Wells, a spokesman for Dyal, said in a statement.

Dyal has flourished in the last decade buying up passive stakes in money managers. But it now finds itself at odds with some of those marquee investments as it tries to pull off a tangled transaction. Its merger and subsequent plan to go public through a blank-check company have run into roadblocks because of the entities involved.

Resentment was stoked by a December announcement from Dyal and Owl Rock that sketched out their plan to combine with $45 billion in assets. The duo elected to simultaneously merge with a blank-check company backed by HPS Investment Partners to take it public.

HPS and Owl Rock not only compete with firms such as Golub and Sixth Street, but just like those firms, they’d also previously sold an ownership stake to Dyal.

Last week, Sixth Street asked a judge in the Delaware Chancery Court to put the combination on hold until she can determine whether a 2017 agreement gives it the power to kill the deal. Golub’s lawsuit also alleges improper disclosure of confidential information while Dyal was seeking to raise funds for a new vehicle last year.

The case is GCDM Holdings v. Dyal Capital Partners Mirror Aggregator (A), New York State Supreme Court (Manhattan).

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