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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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DICKSTEIN PARTNERS INC.
_________________________________________________________________
TEL: 212-754-4000
FAX: 212-754-5825
June 12, 1995
MAXIMIZE THE VALUE OF YOUR INVESTMENT IN HILLS STORES NOW.
VOTE TO ELECT NOMINEES COMMITTED TO THE SALE OF HILLS.
DEAR HILLS STORES STOCKHOLDER:
Dickstein Partners is seeking your vote on the enclosed BLUE
proxy card to elect its seven nominees to the Board of Hills
Stores Company at the upcoming Annual Meeting scheduled for
Friday, June 23, 1995.
Our nominees are fully committed to a sale of Hills Stores
to the highest bidder, conducted through an auction under the
direction of a special, independent committee of the Board of
Directors.
WHY WAIT TO SEE IF MANAGEMENT'S RISKY
GROWTH STRATEGY WILL PAY OFF?
Management wants you to believe that its "growth strategy"
will result over time in a higher stock price. But how long will
it take? Will it ever happen?
We believe that management's "growth strategy" is risky,
especially considering that Hills has yet to go head-to-head
against Target Stores in most of its markets.
Even if management's growth plans are successful, this may
not result in increased value for your Hills shares. With
competition increasing, short term financial success does not
guarantee a higher share price. Despite the Company's successful
operating and financial performance, prior to our proposal to
acquire Hills, its shares traded poorly. The fact that the stock
prices of other successful discount retailers are trading at or
near their twelve-month low -- as management itself indicates --
underscores this point.
NOW IS THE TIME TO SELL HILLS STORES.
We believe Hills stockholders will benefit far more from a
successful auction of the Company to the highest bidder. We
believe an auction is the best available means to provide
stockholders with an immediate and substantial increase in value
for their shares. You need not wait to see if management's
highly uncertain "growth strategy" will result in a higher share
price several years from now.
9 West 57th Street, Suite 4630 New York, N.Y. 10019
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YOU DECIDE WHO IS MORE LIKELY TO ACT
IN THE BEST INTERESTS OF STOCKHOLDERS.
We have pledged to form an independent special committee to
conduct the auction. At a minimum, the committee would consist
of John Burden, the former Chairman of Federated Department
Stores, and Chaim Edelstein, the former Chairman and CEO of
Abraham & Straus, two experienced retailing executives with well-
deserved reputations for integrity and financial acumen. We have
also proposed that Hills' current Chief Executive Officer,
Michael Bozic, and current Chief Financial Officer, John Reen,
serve on this special committee.
Management wants you to believe that our nominees would not
act in the best interests of stockholders. Ask yourself,
however, in whose interest your current Board is acting by
refusing to conduct an auction. Also consider in whose interest
the Board was acting when it voted to:
o Pay its non-executive Chairman, Thomas H. Lee, $250,000
a year.
o Pay Board member and consultant, Norman Matthews,
$750,000 per year, as well as provide him with a $2
million golden parachute.
o Provide members of senior management with golden
parachute payments totaling approximately $20 million.
We or any other prospective purchaser of Hills would be able
to pay more for your shares if these golden parachutes payments
were not required.
OUR ACQUISITION PROPOSAL DEMONSTRATES OUR COMMITMENT TO
REALIZING MAXIMUM VALUE FOR STOCKHOLDERS.
As you know, Dickstein Partners has submitted a proposal to
acquire Hills. This proposal is summarized in our proxy
statement which was previously mailed to you. If an auction for
Hills is commenced (whether by the current Board or the Dickstein
nominees, if elected) we intend to submit an acquisition proposal
worth at least as much as our current proposal.
TIME IS SHORT. VOTE YOUR BLUE PROXY TODAY.
The June 23 Annual Meeting is less than two weeks away. We
ask you to mark, sign, date and mail the enclosed BLUE card in
the postage-paid envelope provided. Please do so today.
To ensure your support for our nominees and the auction of
the Company to the highest bidder, you should not return any of
management's White cards, even as a protest vote against the
current Board. Simply ignore management's White cards.
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SEND A MESSAGE THAT YOU WANT TO SEE THE VALUE OF
YOUR HILLS INVESTMENT MAXIMIZED IMMEDIATELY.
If you have already voted to support management, you have
every legal right to change your mind and vote to support the
Dickstein nominees on the BLUE card. Doing so will revoke your
White management proxy. Only your latest-dated proxy card will
count in this election contest.
RISKY GROWTH STRATEGY VS. SALE TO THE HIGHEST BIDDER.
YOUR CHOICE IS CLEAR.
A vote for the Dickstein nominees provides you with a Board
of Directors fully committed to a sale of Hills Stores to the
highest bidder. We appreciate your support of our initiative.
Sincerely,
/s/ Mark Dickstein
MARK DICKSTEIN
If you have questions or need assistance in voting your
shares, please contact:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
Call Toll-Free (800) 322-2885
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