If he's a 'great guy' and the kid respects him, a good father-to-son talk might make a world of difference. He probably doesn't want things to escalate.
The kid is likely subconsciously acting out towards your kids because he's threatened by your relationship with his mother. Been there and done that.
I used a slightly unorthodox approach with 'bully' children when my kids were exposed to them. We'd have a 'little talk' where I explained to them privately that, even though they were bigger than whoever they were bullying, I was bigger than them.
And I was older, so I knew how to be meaner and get away with it.
Never got to the point of anything physical, but there was definitely an implied threat........... Worked every time, thankfully !
Protect your daughter NO MATTER WHAT. She's an innocent in this situation.
Good luck with the 'blending' !