CSK rights plan follows unsolicited offer from O'Reilly

By Lisa Kerner

Charlotte, N.C., Feb. 4 - CSK Auto Corp. said it adopted a shareholder rights plan designed to "maintain the integrity of the strategic review process" that the company's board is currently conducting with the assistance of JPMorgan.

Some 20 companies have been given access to company information under the review process, according to a company news release.

O'Reilly Automotive, Inc., which chose not to participate in the process, made an unsolicited bid for the company on Feb. 1.

In O'Reilly's offer, CSK shareholders would receive $8 cash per share in a deal valued at $845 million including $490 million of CSK debt.

CSK said the adoption of the rights plan supports the board's intent to complete its process as initially contemplated so as to best preserve and maximize shareholder value.

Under the rights plan, one right will be issued for each share of CSK common stock outstanding as of Feb. 14. The rights are not exercisable.

The rights would be triggered by:

• Any person acquiring or intending to acquire 10% or more of CSK's common stock;

• Consummation of any transaction in which CSK is not the surviving entity;

• The outstanding shares of CSK common stock being exchanged for stock or assets of another person; or

• The sale of 50% or more of CSK's consolidated assets or earning power.

If ownership thresholds are exceeded and the rights are not redeemed, then each right will entitle the holder, other than the triggering party, to purchase a number of shares of CSK's common stock having a value of twice the $45 exercise price.

The exercise would effectively dilute the triggering party's holdings in CSK, the release stated.

CSK said the rights will expire on Feb. 3, 2009, or Feb. 4, 2011 if extended by the company's shareholders.

O'Reilly Automotive is a specialty retailer based in Springfield, Mo.

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

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