Analysis ATAC.U

Owl Rock Capital Group and Dyal Capital Partners SPAC deal: Legal Hurdle cleared

, Bloomberg Quint

Golub Capital was denied a court order it sought to temporarily bar its part-owner Dyal Capital Partners from merging with a rival in the direct-lending business, a deal that has spurred a legal backlash against Dyal.

New York State Supreme Court Justice Joel Cohen made the ruling from the bench on Friday, saying Golub was unlikely to succeed on the merits of its case. He called Golub’s contention that Dyal had given up its right to make such deals when it bought a stake in Golub in 2018 “wildly implausible.”

Dyal and Owl Rock Capital Partners announced in December that they would combine and go public in a $12 billion deal through a special purpose acquisition company, or SPAC, marking hot Wall Street trends such as listing via a blank-check firm and a new ebullience over direct lending. The merged company, Blue Owl, would have $45 billion in assets.

Dyal, a Neuberger Berman subsidiary, has prospered over the past decade buying up passive stakes in money managers. Now some of those relationships are under strain from the Owl Rock deal, which could see Dyal emerge as a rival to some of the very investment firms in which it holds ownership interests. On top of it all, the blank-check company effecting the merger is Altimar Acquisition Corp., a SPAC backed by HPS Investment Partners, which also competes with firms Dyal has backed.

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