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O'Reilly Automotive joins CSK Auto's review process
By Lisa Kerner
Charlotte, N.C., Feb. 7 - CSK Auto Corp. entered into a standstill agreement with O'Reilly Automotive, Inc., thus including O'Reilly in its review of strategic alternatives.
O'Reilly joins some 20 other companies that have been given access to non-public information related to CSK's business.
"We are pleased that we have been able to reach an agreement with O'Reilly that will enable them to participate in our process," CSK president and chief executive officer Larry Mondry said in a company news release.
CSK recently adopted a shareholder rights plan following O'Reilly's 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, a prior news release stated.
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.
As previously reported, 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 rights are slated to expire on Feb. 3, 2009, or on Feb. 4, 2011 if extended by the company's shareholders.
O'Reilly Automotive is an automotive specialty retailer based in Springfield, Mo.
CSK Auto is a Phoenix-based specialty retailer of auto parts and accessories.
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