December 22, 2012

Hostess narrowing bids for snack cake, bread brands

Sales could be completed as early as mid-March, the Irving, Texas-based company says.

By CANDICE CHOI The Associated Press

NEW YORK - Twinkies, Wonder Bread and Devil Dogs are likely to return to shelves in coming months, but probably not under the same owners.

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Former Hostess products: Nine shelf lives?

Staff File Photo

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The Associated Press

Hostess Brands Inc. said in bankruptcy court Friday that it's narrowing down the bids it received for its brands and expects to sell off its snack cakes and bread to separate buyers. The testimony came from an investment banker for Hostess, which is in the process of liquidating.

A likely suitor has emerged for the namesake Hostess brand, which includes Twinkies, Ding Dongs and Ho Hos, along with Dolly Madison cakes, which includes Coffee Cakes and Zingers, said Joshua Scherer of Perella Weinberg Partners. He said another viable bid was made for Drake's cakes, which includes Devil Dogs, Funny Bones and Yodels. That bidder also wants to buy the Drake's plant in Wayne, N.J., which Scherer said is the country's only kosher bakery plant.

Additional bids have been submitted for its bread brands, which include Wonder and Home Pride. Hostess expects to file binding "stalking horse" bids for many of its brands in January. Those filings would be followed by a four-week auction process to allow competing bids. Sales could be completed by as early as mid-March.

About 30 plants could also be sold with the brands, Scherer said, with six plants, several warehouses and a fleet of trucks likely to be closed or scrapped.

Hostess has hired Hilco to act as a sales agent for those additional assets; the firm will also give Hostess a $30 million loan to maintain operations during its liquidation, which is expected to take about a year.

Hostess, based in Irving, Texas, had said it would retain about 3,000 workers to shutter plants and perform other tasks. On Friday, an attorney for Hostess said in court that figure was down to about 1,100 employees.

 

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