O'Reilly Automotive seeks to acquire CSK Auto for $845 million

By Lisa Kerner

Charlotte, N.C., Feb. 1 - O'Reilly Automotive, Inc. proposed acquiring CSK Auto Corp. to form the third-largest auto parts retailer in the United States.

CSK shareholders would receive $8 cash per share in a deal valued at $845 million including $490 million of CSK debt.

The per-share price is a 34% premium over CSK's closing stock price on Jan. 31 and a 63% premium over the average trading stock price for CSK over the last 30 days.

The proposal is not subject to a financing condition.

O'Reilly expects the acquisition to be accretive to earnings in the first full year after the acquisition is completed.

"While we still prefer to work together with CSK and its board of directors to negotiate a mutually beneficial agreement for our respective stakeholders, we feel we have been forced to take our proposal directly to CSK's shareholders," O'Reilly chief executive officer Greg Henslee said in a news release.

In December, CSK retained JPMorgan to assist its board in evaluating alternatives to maximize shareholder value. As a result, more than 20 parties have entered into confidentiality or standstill agreements and been granted access to non-public information.

According to CSK, O'Reilly can participate in the process but has declined to do so.

"We are conducting a thoughtful and comprehensive process, and we fully intend to complete the process as planned in order to ensure a result that we believe will serve the best interests of our stockholders," CSK president and CEO Larry Mondry said in a CSK statement.

CSK Auto is a Phoenix-based specialty retailer of auto parts and accessories.

O'Reilly Automotive is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories. The company is based in Springfield, Mo.

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