
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, June 15, 1995                   TAG: 9506150060
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: The New York Times
DATELINE:                                 LENGTH: Medium

2 BIDDERS COMPETE FOR HILLS

Venture Stores Inc. and Apollo Advisers L.P. are potential bidders for control of Hills Stores Co., people involved in the battle over the regional discount store chain said Wednesday.

Those people said Venture, which operates 113 discount stores in the Midwest, has been in contact with Dickstein Partners Inc., an investment firm that holds 13.2 percent of Hills' shares and has begun a proxy fight for control of the company's board.

They also said that Apollo, the large investment firm headed by the former co-head of mergers and acquisitions at Drexel Burnham Lambert, Leon Black, had spoken with Michael Bozic, chief executive of Hills, about sponsoring a management-led buyout of the company.

Apollo recently raised $900 million for leveraged buyouts.

``We are in the middle of a proxy fight and are in the process of visiting investors,'' Bozic said in a statement Wednesday. ``So it would be improper for us to comment on every bit of information that is floated in the market.''

Michael Gross, a principal at Apollo, declined to comment, although he noted that Apollo would not enter into an ``unfriendly'' transaction.

``It's a rumor, and we don't comment on rumors,'' said Kim Phillips-Groneck, a spokeswoman for Venture.

Mark Dickstein, president of Dickstein Partners, said he had been approached by a ``strategic buyer with an interest toward acquiring Hills.'' He refused to identify the potential buyer.

Hills has been fighting off the overtures of Dickstein and his firm for about a year. Dickstein, which obtained its original stake in Hills when the company restructured after a bankruptcy, contends Hills' shares are undervalued and its management and board have done little to bolster the price.

In an effort to improve the stock price, Dickstein offered to buy the company for $27 a share in cash and debt. Hills rejected that offer, saying it doubted Dickstein's ability to finance such a deal.

Dickstein intends to hold an auction for the company if it wins its proxy fight. Some people who have been following the firm's efforts to raise the stock price had suggested that it was responsible for circulating the rumors about more potential suitors.

by CNB