Prospectus - O REILLY AUTOMOTIVE INC - 4/1/2008 - O REILLY AUTOMOTIVE INC - 4-1-2008 by ORLY-Agreements

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									UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

April 1, 2008

CSK Auto Corporation
__________________________________________ (Exact name of registrant as specified in its charter) Delaware _____________________ (State or other jurisdiction of incorporation) 645 E. Missouri Ave., Suite 400, Phoenix, Arizona _________________________________ (Address of principal executive offices) Registrant’s telephone number, including area code: Not Applicable ______________________________________________ Former name or former address, if changed since last report 001-13927 _____________ (Commission File Number) 86-0765798 ______________ (I.R.S. Employer Identification No.) 85012 ___________ (Zip Code) 602-265-9200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [x] [ ] [ ] [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Top of the Form Item 8.01 Other Events. On April 1, 2008, CSK Auto Corporation (the "Company") and O'Reilly Automotive, Inc. ("O'Reilly") issued a joint press release announcing that the Company and O'Reilly have entered into a definitive merger agreement under which O’Reilly has agreed to make an exchange offer to acquire all of the outstanding shares of the Company’s common stock (the "Transaction"). The full text of the press release is filed as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference. On April 1, 2008, the Company distributed a memorandum to its employees with respect to the Transaction. The full text of the memorandum is filed as Exhibit 99.2 to this current report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits. (d) The following exhibits are filed with this Form 8-K: Exhibit Description 99.1 Joint Press Release dated April 1, 2008. 99.2 Employee Communication dated April 1, 2008.

Top of the Form SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CSK Auto Corporation April 1, 2008 By: Randi Val Morrison Name: Randi Val Morrison Title: Senior Vice President, General Counsel and Secretary

Top of the Form Exhibit Index

Exhibit No.

Description

99.1 99.2

Joint Press Release dated April 1, 2008. Employee Communication dated April 1, 2008.

O’REILLY TO ACQUIRE CSK AUTO FOR $1.0 BILLION -CSK shareholders to receive $12.00 in value per share including $11.00 of O’Reilly common stock plus $1.00 in cash per CSK share -Combined company will be third largest national auto parts retailer -Compelling strategic fit with highly complementary geographic presence Springfield, MO and Phoenix, AZ - April 1, 2008 — O’Reilly Automotive, Inc. (―O’Reilly‖) (Nasdaq: ORLY) and CSK Auto Corporation (NYSE:CAO) (―CSK‖) today announced that the two companies have signed a definitive merger agreement under which O’Reilly will acquire all of the outstanding shares of CSK common stock pursuant to an exchange offer, in a transaction valued at approximately $1.0 billion, including approximately $500 million of debt. The boards of directors of both companies have approved the transaction. Under the terms of the agreement, CSK shareholders will receive $11.00 of O’Reilly common stock, subject to a collar, plus $1.00 in cash for each share of CSK common stock. The amount of consideration to be received per share of CSK common stock will equal a number of shares of O’Reilly common stock based on an exchange ratio equal to $11.00 divided by the average trading price of O’Reilly common stock for the five trading days ending two trading days prior to the consummation of the exchange offer plus $1.00 in cash (subject to reduction); provided, however, that if the average trading price of O’Reilly stock is greater than $29.95, then the exchange ratio shall equal 0.3673, and if the average trading price is less than $25.67, then the exchange ratio shall equal 0.4285. ―Today is an exciting day for both O’Reilly and CSK shareholders,‖ stated O’Reilly Automotive Chief Executive Officer Greg Henslee. ―As a combined company, we will be even stronger and more competitive, with the ability to better meet the continuing evolution of the automotive aftermarket industry. Additionally, we are creating a company that will generate significant value for the combined companies’ shareholders, growth opportunities for team members and enhanced service to our customers.‖ ―The benefits of this transaction are very compelling,‖ said Larry Mondry, CSK Auto’s President and Chief Executive Officer. ―After careful consideration of a number of viable alternatives, our Board has determined that partnering with O’Reilly is clearly the best course of action for our shareholders. As part of a stronger, more financially flexible company, shareholders, creditors and suppliers will have a meaningful opportunity to participate in the development of a company that will be well positioned to be a nation-wide leader in the automotive aftermarket industry. Equally important, this transaction provides growth and advancement opportunities for CSK’s team members.‖ The transaction will create a combined entity that expects to realize several significant strategic benefits, including: • Leading auto-parts retailer Following the close of the transaction, O’Reilly will be the third largest national auto parts retailer with approximately 3,200 stores located across the United States. The combined company had pro forma revenues of approximately $4.4 billion in 2007.
•

Strengthened and diversified position, creating a national platform O’Reilly and CSK maintain highly complementary business models in two distinctive regions of the country. Building upon the foundation of CSK’s strong Western presence and O’Reilly’s Midwestern and Southeastern presence, the combined company will be well positioned to further leverage O’Reilly’s very effective dual-market strategy. Additionally, acquiring CSK will give O’Reilly a national platform and will allow further expansion into other geographical regions throughout the country. • Opportunity to enhance existing CSK operations

O’Reilly expects to strengthen CSK’s existing operations by executing its proven dual market strategy of providing exceptional service to both DIY customers and professional installers. The implementation of O’Reilly’s industry-leading distribution and inventory management systems will further improve the combined company’s competitiveness in CSK’s markets. Financial Considerations O’Reilly anticipates that the transaction will be modestly accretive to O’Reilly’s earnings per share in fiscal year 2009. Cost savings are expected to be approximately $100 million annually beginning in fiscal year 2010, resulting in more significant earnings per share accretion. O’Reilly expects synergies to come primarily from leveraging the combined company’s buying power to lower product acquisition cost and streamlining CSK’s SG&A expense structure by implementing O’Reilly’s dual market strategy. Timing, Approvals and Financing The transaction is subject to the successful conclusion of the exchange offer as well as customary closing conditions and antitrust approvals, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Based on the closing stock prices on Monday, March 31, 2008, O’Reilly expects to issue approximately 16 million shares of O’Reilly common stock to be issued to CSK shareholders. O’Reilly has entered into a commitment for a $1.2 billion asset based revolving credit facility with Bank of America and Lehman Brothers Inc. which will be used to refinance debt, fund the cash portion of the consideration and other transaction-related expenses and to provide ample liquidity for the combined company going forward. Lehman Brothers Inc. is serving as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal adviser to O’Reilly. JP Morgan Securities Inc. is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to CSK. Investor/Analyst Conference Call O’Reilly will provide further details regarding this announcement on a conference call with analysts and investors scheduled for Tuesday, April 1 at 10:00 am Eastern time. Those who wish to participate should call 800-865-4445 for domestic callers or 973-935-2840 for international callers. When prompted, provide the passcode, which is 41919438. The conference call will also be webcast on the Investor Relations section of O’Reilly website at www.oreillyauto.com . For interested individuals unable to join the live call, a replay of the webcast will be available on O’Reilly’s website. About O’Reilly Automotive, Inc O’Reilly Automotive, Inc. is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional installer markets. Founded in 1957 by the O’Reilly family, the Company operated 1,830 stores in the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of December 31, 2007. About CSK Auto CSK Auto Corporation is the parent company of CSK Auto, Inc., a specialty retailer in the automotive aftermarket. As of January 6, 2008, the Company operated 1,349 stores in 22 states under the brand names Checker Auto Parts, Schuck’s Auto Supply, Kragen Auto Parts, and Murray’s Discount Auto Stores. Additional Information In connection with the exchange offer, O’Reilly intends to file a registration statement on Form S-4 and a Schedule TO with the Securities Exchange Commission (―SEC‖) and CSK intends to file a solicitation/recommendation statement on Schedule 14D-9. Such documents, however, are not currently available. These documents contain important information about the transaction and should be read before any decision is made with respect to the exchange offer. Investors will be able to obtain free copies of the registration statement, Schedule TO, Schedule 14D-9 as well as other filings containing information about O’Reilly and CSK without charge, at the SEC’s website (http://www.sec.gov) once such documents are filed with the SEC. A free copy of the exchange offer materials, when they become available, may also be obtained from O’Reilly or CSK.

O’Reilly Contacts Joele Frank, Wilkinson Brimmer Katcher Ed Trissel, 212-355-4449 CSK Contacts Investors: CSK Auto Corporation, Phoenix Brenda Bonn, 602-631-7483 Manager, Investor Relations Media: Sard Verbinnen & Co. Paul Kranhold, 415-618-8750 or Drew Brown, 212-687-8080

April 1, 2008 To all associates — I am writing to share some important news about our company. This morning we announced that we have entered into a definitive agreement with O’Reilly Automotive, Inc. (Nasdaq: ORLY) under which O’Reilly will acquire CSK Auto Corporation in a part stock, part cash transaction. As you know, over the last several months our Board of Directors has been evaluating strategic opportunities to determine the best course of action for CSK Auto. We realize that this time period has been filled with considerable anxiety in view of the uncertainties associated with the outcome, and the Board and I would like to thank all of you for your patience and support during this time period. I can assure you that this has been a rigorous process that included the evaluation of a broad range of opportunities. We considered the potential for continuing as a standalone company, divesting assets and recapitalizing the business, and held discussions with a number of strategic and financial parties concerning various potential business combinations and transactions. After careful consideration, it is clear to our Board – and our management team – that joining with O’Reilly under the terms that we have agreed upon is the best course of action for all of our stakeholders. The combination of CSK and O’Reilly will create a company well positioned to be a nationwide leader in the automotive aftermarket industry. CSK’s leading market position and strong brand name recognition in the Western United States, together with O’Reilly’s significant presence in most other regions of the United States, will give the combined company a national presence, with little market overlap. In addition, O’Reilly, with its strong commercial sales program, has great potential to successfully grow the commercial sales business in our stores. The transaction also provides the owners of our company, our shareholders, significant immediate value — a meaningful opportunity to participate in a well regarded company with a strong balance sheet that is a leading player in our industry. It is important to realize that today’s announcement is the first step in consummating a combination with O’Reilly. Nothing will change overnight. Before our companies can combine, certain conditions, such as regulatory filings and approvals, must be made and obtained. Assuming all goes as planned, we expect to receive the necessary approvals and to close the transaction within the next few months. Until that time, we will continue to operate as an independent company, and I encourage you to stay focused on strengthening our brands and our business for the benefit of our stakeholders. I realize that you have many questions, and we will be diligent in addressing those questions in the weeks ahead. You will be hearing more from me and our transition teams as we work with O’Reilly to develop a comprehensive integration plan to ensure a seamless transition as we combine the two companies. I’ve attached a press release that contains more information about the transaction. I encourage you to please read the release and to contact your supervisor or me with any additional questions. Our vendors and customers will also have questions and we will help to prepare you to address those questions. Together CSK and O’Reilly will be a stronger company with an ability to drive growth in our markets, which will ultimately be better for our customers and you, our employees. The most important thing to communicate is that we will continue to deliver the same high quality service that our vendors and customers have come to expect from us. As always, should you be contacted by the media, please direct them to our investor relations firm, Sard Verbinnen — Paul Kranhold at 415 618 8750 or Drew Brown at 212 687-8080. Investor inquiries should be directed to Brenda Bonn. I’d like to thank you again for your dedication and hard work as an employee of CSK. Regards, Larry


								
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