SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 6
to
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Hills Stores Company
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
431692102
(CUSIP Number)
David P. Levin, Esq.
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
September 20, 1994
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box: /_/
Check the following box if a fee is being paid with this
statement: /_/
Page 1 of 7 pages
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Amendment No. 6 to Schedule 13D
This Statement amends the Schedule 13D, dated May 6,
1994, as amended on July 22, 1994, July 28, 1994, August 11,
1994, August 17, 1994 and August 30, 1994 (the "Schedule 13D"),
filed by Dickstein & Co., L.P., Dickstein International Limited,
Dickstein Focus Fund L.P., Dickstein Partners, L.P., Dickstein
Partners Inc. and Mark Dickstein with respect to the Common
Stock, $.01 par value (the "Common Stock"), of Hills Stores
Company, a Delaware corporation (the "Company"). Notwithstanding
this Amendment No. 6, the Schedule 13D speaks as of its date.
Capitalized terms used without definition have the meanings
ascribed to them in the Schedule 13D.
I. Item 4 of the Schedule 13D, "Purpose of Transaction," is
amended by adding the following paragraphs:
"On September 20, 1994, Dickstein Partners Inc.
issued the press release attached hereto as Exhibit 5 (see Item 7
below)."
II. Item 7 of Schedule 13D, "Material to be Filed as Exhibits,"
is amended by adding the following language:
"Exhibit 5 Press Release dated September 20, 1994."
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SIGNATURE
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certifies that the
information set forth in this Statement is true, complete and
correct.
Date: September 21, 1994
DICKSTEIN & CO., L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P., the general partner
of Dickstein & Co., L.P.
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN INTERNATIONAL LIMITED
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
agent of Dickstein International
Limited
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN FOCUS FUND L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P., the general partner
of Dickstein Focus Fund L.P.
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN PARTNERS, L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P.
/s/ Alan Cooper
Name: Alan Cooper
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DICKSTEIN PARTNERS INC.
By: Alan Cooper, as Vice President
/s/ Alan Cooper
Name: Alan Cooper
/s/ Mark Dickstein
Name: Mark Dickstein
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
5 Press Release dated September 20, 1994. 6
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EXHIBIT 5
News Release MACKENZIE
PARTNERS, INC.
CONTACT: 156 FIFTH AVENUE
Daniel H. Burch NEW YORK, NY 10010
212-929-5500 212 929-5500
FAX 212 929-0308
FOR IMMEDIATE RELEASE:
HILLS REJECTS DICKSTEIN SETTLEMENT PROPOSAL
NEW YORK, N.Y. (September 20, 1994) - Dickstein Partners
Inc. today announced that if it successfully removes and replaces
four of the eight Hills Stores directors in its consent
solicitation which began on August 16, its nominees would seek to
have Hills purchase 4.63 million of its shares for $27 principal
amount per share ($125 million) of a new holding company 12% cash
pay twelve-year debentures. Previously Dickstein had announced
that its nominees would pursue a 5.5 million share, or $150
million buyback.
Dickstein Partners also announced that in an attempt to
expeditiously and consensually resolve the current situation it
has made a settlement proposal to Hills (see below) which
includes, among other things, the following terms:
1) Termination of the consent solicitation
2) $100 million stock buyback utilizing Dickstein's
structure ($27 for 3.7 million shares)
3) Three Dickstein designees are appointed to Hills Board
4) Hills recent golden parachute amendments are rescinded
5) Poison pill threshold is raised from 15% to 20%
Mark Dickstein, President of Dickstein Partners Inc. said
"Several large Hills shareholders have told us that they prefer a
$100 million to $125 million buyback over our original $150
million proposal. This lower debt level should easily afford
Hills the opportunity to, if warranted, pursue a growth strategy
of opening ten to twenty new stores a year. Furthermore, our
settlement proposal would only require $12 million of cash in
1995 as compared to the $35 million Hills has told several
shareholders it is willing to spend to repurchase stock."
Mr. Dickstein also said "This settlement proposal is on the
table through September 26. In the meantime we will be
continuing to solicit consents, a process which to date is going
well. Company representatives in rejecting our proposal have
informed us that in their view a majority of the Hills
shareholders prefer a $35 million buyback using cash to a $100
million buyback proposal. As a result, our consent solicitation
has in essence become a referendum as to which proposal the
shareholders prefer."
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Wilbur Ross of Rothschild, Inc., financial advisor to
Dickstein commented, "The Dickstein proposal in no way
jeopardizes the company or compromises any realistic growth
plan."
DICKSTEIN SETTLEMENT PROPOSAL
Dickstein will terminate its consent solicitation if Hills agrees
to all of the following items:
1) $100 million buyback using Dickstein Partners Inc.
structure, with up to $2 million to be paid to a third party
standby underwriter.
2) Dickstein Partners Inc. reimbursed for up to $1 million of
expenses including success fees to Rothschild and MacKenzie.
3) Two incumbent Hills directors resign and Mark Dickstein,
Mark Kaufman and one other Dickstein designee is appointed
to Hills board.
4) Hills' recent golden parachute amendments are rescinded.
5) The threshold for triggering the poison pill is raised from
15% to 20%.
6) Thru 3/1/97 - Dickstein Partners Inc. will not:
a) seek to remove or replace the remaining six incumbent
directors
b) seek to increase its ownership position to more than
20% of Hills voting stock
7) Thru 3/1/97 - Hills agrees to support the reelection of the
Dickstein directors.
8) The corporate charter is amended so that any action by the
board on the following items require more than a two-thirds
vote:
a) employment agreements (including modifications of
existing agreements)
b) changing the poison pill
c) expanding the size of the board, or changing the timing
or manner in which directors are elected or nominated.
d) issuing or granting new stock or new stock options
9) Registration Rights on demand for any stock owned by
Dickstein Partners Inc. or its affiliates.
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