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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /_/
Filed by a Party other than the Registrant /x/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
Hills Stores Company
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
Dickstein Partners Inc.
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2).
/x/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).*
/_/ Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
_______________________________________________________________
(2) Aggregate number of securities to which transaction
applies:
_______________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:(1)
________________________________________________________________
_________________________
(1) Set forth the amount on which the filing fee is calculated
and state how it was determined.
* Previously paid.
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_______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount Previously Paid:
_________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_________________________________________________________________
(3) Filing Party:
_________________________________________________________________
(4) Date Filed:
_________________________________________________________________
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NEWS RELEASE MACKENZIE
PARTNERS INC.
156 Fifth Avenue
New York, NY 10010
CONTACT: 212 929-5500
Stan Kay FAX 212-929-0308
(212) 929-5940
FOR IMMEDIATE RELEASE:
DICKSTEIN PARTNERS PLACES EQUITY FOR HILL STORES OFFER
NEW YORK, NEW YORK, June 14, 1995 -- Dickstein Partners Inc.
today announced that it has entered into agreements with Indosuez
Capital, Canyon Partners and Golub Associates regarding the
investment of $20 million of equity capital in its proposed
acquisition of Hills Stores Co. (NYSE: HDS).
Dickstein Partners also announced that it is now willing to
provide the balance of the $75 million of equity capital required
to finance the proposed acquisition under the terms of the
"highly confident" letters which have been provided to Dickstein
Partners Inc. from NatWest Markets and NatWest Bank N.A.
Mark Dickstein, President of Dickstein Partners Inc., commented,
"At this time we have decided to accept only $20 million from
outside investors. This will provide us with maximum financial
flexibility for what we hope will be the auction of Hills Stores,
at which point Hills will presumably allow us to negotiate with
other Hills shareholders regarding their investment of equity
capital. In this auction, if we can obtain a merger agreement in
which the existing board approves of the prospective change in
control, obviating the need for more than $20 million of golden
parachute payments, then we believe it probable that we can raise
our offer.
Among the reasons that we are now willing to commit more equity
capital to this transaction is the level of interest that has
been expressed to us from both financial and strategic buyers in
acquiring Hills."
Dickstein Partners also responded to the question posed by Hills
management in a letter sent to all shareholders dated June 12:
1. Where is Dickstein's financing? On May 24 we filed with the
SEC "highly confident" letters provided to Dickstein Partners
Inc. from NatWest Markets and NatWest Bank N.A. which detail
their willingness to provide debt financing for our offer of $22
per share in cash plus $5 per share of new debt described in our
proxy materials.
-more-
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Dickstein Partners/Hills Stores. Co.
June 14, 1995
Page Two
2. Will Dickstein ever make a firm offer? On May 24, in a
letter sent to Hills, we offered pursuant to a merger, to acquire
all of Hills' outstanding shares for $22 in cash and $5 per share
of new debt. This is a firm offer.
3. Will Dickstein's hand-picked nominee run a fair auction of
Hills? Yes. We also encourage the existing board to instead
serve as auctioneers.
4. What if Dickstein wins but cannot sell Hills? We expect the
existing Board to delay Hills' annual meeting and put Hills up
for sale if it becomes apparent that we will win the proxy fight.
However, if they do not, NatWest Bank N.A. has informed us that
they are "highly confident" that they will provide Hills with
financing when the Dickstein slate is elected. The Dickstein
nominees would then conduct an auction in which Hills would be
sold to the highest bidder - an auction in which we intend to
offer at least as much as our current proposal.
5. Will Mark Dickstein favor his own interests over yours?
Consider the following: The Chairman of the Board of Hills.
Thomas H. Lee, who led hills into bankruptcy, receives a
consulting fee of $250,000 a year from Hills plus regular
director fees, while another Board member is the beneficiary of a
$2 million golden parachute.
In sharp contrast, Mark Dickstein, who is Chairman of the Board
of Carson Pirie Scott & Co., and who led Carson's out of
bankruptcy, received $38,000 in director fees last year from
Carson's - approximately the same compensation as all other
Carson's directors.
Mark Dickstein further commented, "Now that all our financing is
arranged, we believe the choice for Hills' shareholders is clear
- -- to vote for directors committed to a sale of Hills to the
highest bidder, with our acquisition proposal serving as a
floor."
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