NEW YORK -- Hills Stores Co. management, which has been fighting off a hostile takeover bid by Dickstein & Co. LP, said Wednesday that its board approved a plan to repurchase 3 million Hills shares for $75 million, or $25 a share.

The proposal follows a Dickstein plan to take control of Hills and buy back 4.63 million Hills shares at $27 a share in new debentures.

Hills said it expects to finance the repurchase with cash available and additional borrowings of $40 million. Since provisions of outstanding senior notes currently restrict the amount of funds it may use to repurchase its shares, Hills proposes either to form a new holding company or obtain a waiver from the senior note holders to permit the offer.

Hills, a discount store operator, has its headquarters in Canton, Mass. Dickstein is an investment company based here.

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