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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the Securities Exchange Act of 1934
HILLS STORES COMPANY
(Name of Subject Company)
HILLS STORES COMPANY
(Name of Person Filing Statement)
Common Stock Series A Convertible Preferred Stock
Par Value $0.01 Per Share Par Value $0.10 Per Share
(Titles of Classes of Securities)
431692102 431692201
(CUSIP Number of Class of Securities)
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William K. Friend
Senior Vice President--Secretary and Corporate Counsel
Hills Stores Company
15 Dan Road
Canton, Massachusetts 02021
(781) 821-1000
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person filing statement)
COPIES TO:
Paul S. Pearlman, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
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This Amendment No. 1 amends and supplements the information set forth
in the Solicitation/Recommendation Statement pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934, as amended, on Schedule 14D-9 (the "Schedule
14D-9") filed by Hills Stores Company, a Delaware corporation (the "Company), on
November 18, 1998, with respect to a tender offer described in the Tender Offer
Statement on Schedule 14D-1 filed with the Securities and Exchange Commission on
November 18, 1998, by Ames Department Stores, Inc., a Delaware corporation
("Ames"), and HSC Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Ames (the "Purchaser"), relating to an offer by the Purchaser to
purchase all the issued and outstanding shares of common stock, par value $0.01
per share, and Series A Convertible Preferred Stock, par value $0.10 per share,
including, in each case, the associated preferred stock purchase rights
(together, the "Shares"), for an amount equal to $1.50 per Share, net to the
seller in cash, without interest, and a deferred contingent cash right, upon the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase, dated November 18, 1998, and the related Letter of Transmittal and
pursuant to the Agreement and Plan of Merger, dated as of November 12, 1998,
among Ames, the Purchaser and the Company. Unless otherwise indicated, the
capitalized terms used herein shall have the meanings specified in the Schedule
14D-9.
Item 9. Material to be Filed as Exhibits.
Item 9 is hereby amended and supplemented by adding thereto the
following:
Exhibit 7 Letter, dated December 16, 1998, from Hills Stores Company
to Ames Department Stores, Inc. and HSC Acquisition Corp.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 17, 1998
HILLS STORES COMPANY
By: /s/ CHAIM Y. EDELSTEIN
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Name: Chaim Y. Edelstein
Title: Chairman of the Board and
Chief Executive Officer
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Exhibit 7
HILLS STORES COMPANY
15 DAN ROAD
CANTON, MASSACHUSETTS 02021
December 16, 1998
Ames Department Stores, Inc.
HSC Acquisition Corp.
2418 Main Street
Rocky Hill, Connecticut 06067
Gentlemen:
Reference is made to the Agreement and Plan of Merger, by and among
Ames Department Stores, Inc. ("Parent"), HSC Acquisition Corp. ("Purchaser"),
and Hills Stores Company (the "Company"), dated as of November 12, 1998 (the
"Merger Agreement"). Capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Merger Agreement.
The Company hereby consents, pursuant to Section 1.02(a) of the Merger
Agreement, in connection with the increase by Parent and Purchaser of the
aggregate cash consideration payable to each holder of Notes pursuant to the
Note Offer to Purchase and the related Consent Solicitation from 55% to 70% of
the principal amount of the Notes, to the increase by Purchaser of the
percentage in aggregate principal amount of outstanding Notes needed to satisfy
the Minimum Note Condition from at least 66 2/3% in aggregate principal amount
of the then outstanding Notes to at least 85% in aggregate principal amount of
the then outstanding Notes.
In addition, each of Parent, Purchaser and the Company hereby agree
that (i) Section 9.03(j) of the Merger Agreement is hereby amended to add after
the words "prior to the consummation of the Offer" the words "or, if not so
designated prior to the consummation of the Offer, by a majority of those
persons serving as directors of the Company on the date of consummation of the
Offer as promptly as practicable thereafter but in no event later than January
31, 1999," and (ii) paragraph 15 of the Disclosure Schedule is hereby amended as
provided on Schedule 1 hereto.
Except as amended hereby, the Merger Agreement shall continue in full
force and effect.
Very truly yours,
HILLS STORES COMPANY
By: /s/ Chaim Y. Edelstein
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Name: Chaim Y. Edelstein
Title: Chairman of the Board
and Chief Executive Officer
Accepted and Agreed to:
AMES DEPARTMENT STORES, INC.
By: /s/ Rolando de Aguiar
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Name: Rolando de Aguiar
Title: Executive Vice President
