Porter Orlin Submits Letter to Management and Board of Directors of CKE Restaurants, Inc. - Expresses Strong Dissatisfaction with Terms of Announced Going Private Transaction

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NEW YORK--(Business Wire)--
Porter Orlin LLC, a New York-based investment manager and shareholder of CKE
Restaurants, Inc. (NYSE: CKR), has submitted a letter to members of the
company's senior management team and Board of Directors, expressing its strong
dissatisfaction with the recently announced transaction with Thomas Lee Partners
to take CKE private at $11.05 per share.

The full text of the letter follows:

April 5, 2010

Mr. Byron E. Allumbaugh, Chairman of the Board
Mr. Andrew F. Pudzer, Chief Executive Officer
The Board of Directors
CKE Restaurants
6307 Carpinteria Avenue, Suite A
Carpinteria, CA 93013

Dear Madam and Sirs:

Porter Orlin and its affiliated entities are holders of 2,293,744 shares of CKE
Restaurants. We are writing to express our extreme dissatisfaction and
puzzlement with the Board's decision to take the company private through a
transaction with Thomas Lee Partners at the announced price of $11.05 per share.
That price substantially undervalues the business. Moreover, selling the company
at this time, under present market conditions virtually ensures that
shareholders will not realize the true value of their investment. This deal
strikes us as an opportunistic action by Management to take the company from
shareholders at the cheapest price possible, depriving us of the opportunity to
participate in the future growth of this franchise.

Only recently, CKE Management visited us in our offices, and outlined various
positive developments which presage improved results. Among these are improving
sales, and the fact that in the coming year remodeling expenses will be nearing
completion, thus boosting free cash flow dramatically. Given that California, a
significant market for the company, is also now beginning to emerge from its
doldrums, the company will enjoy that benefit in coming quarters and years.

The buyout price results in an equity market value of $600 million. In the
recent recessionary 12 months, the company produced $155 million of operating
cash flow, with capital expenditures ("capex") of $105 million last year.
However, capex is expected to be approximately $90 million in Fiscal 2011
according to the most recent investor update on January 12, 2010. More
significantly, upon completion of the remodeling program ($30 million in the
coming year, to be completed in Fiscal 2011), capex would only be around $60
million. Using the most depressed cash flow of $155 million (which would surely
improve as the economy improves off the bottom and as the remodeled Carl's Jr.
and Hardee's locations start to attract more customers) and maintenance capex of
$60 million results in operating free cash flow of $95 million. This is to be
sold to Management for only $600 million, or 6.3x? We surely do not think this
is close to an adequate price.

The stock has traded above the buyout price as recently as September 16, 2009,
and the takeout multiple of 5.5x enterprise value to trailing EBITDA is less
than the non-deal trading multiples of CKE's peers (6x for smaller burger chains
like Jack In The Box or SONIC Corp., and 7-10x for bigger ones like Burger King
and McDonalds).

The timeframe for competing bids to emerge is far too brief and does not
represent a fair opportunity to get the best price for the company, given all of
the bottoming conditions present at this time. Additionally, competitors would
be bidding against a well-known private equity firm, with a large termination
fee of $9 million­-$15.47 million, and with CKE Management in partnership with
the current bidder. These circumstances are hardly conducive to maximization of
shareholder value.

We are extremely dismayed by the actions of CKE Management, and the Board's
support of those actions to the detriment of shareholders. At the very least we
urge the Board to extend the period for consideration of competing bids. We
would hope that unless shareholders receive fair value they would reject this
deal. Management and the Board should not have put shareholders in this
predicament.

Sincerely,
Paul Orlin Alex Porter

Porter Orlin LLC is a New York-based investment manager, founded in 1976.

Porter Orlin LLC
D. Stowe Rose - Chief Operating Officer and General Counsel,
212-484-5000

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