Could Hostess’ Brands Bloom for Flowers Foods?
Published in CSP Daily News
Nation’s second-largest baker said to be likely bidder for Twinkie, Ho Hos
THOMASVILLE, Ga. -- Flowers Foods Inc., the maker of Tastykake and Nature's Own baked goods, could have a hankering for Twinkies and other products owned by Hostess Brands Inc.
The Thomasville, Ga., company is considered a likely bidder for some of the assets owned by Hostess, according to a report in the Wall Street Journal. Last week, Hostess was granted permission by a federal bankruptcy-court judge to begin liquidating. The end came after a contentious bankruptcy that began in January and culminated this month in a strike.
Flowers, the nation's second-largest baker by sales behind Grupo Bimbo, hasn't stated an intention to acquire Hostess assets, but the company said last week that it had renegotiated lending terms that could allow it to tap additional cash, a signal that it could be gearing up to make a bid, the report stated.
In a CSP Daily News poll this past week, 12% of respondents said they thought Flowers Foods is the most-likely buyer of the Hostess brands, but 18% each (the highest poll totals) thought Bimbo or a private equity/turnaround firm would purchase the brands. Another 12% think Kraft is a likely acquirer.
In bankruptcy court last week, an attorney for Hostess said the company had received a "flood of inquiries" from potential buyers.
"We therefore think there could be very healthy competition," said Heather Lennox, the company's outside lawyer at Jones Day. She added that Hostess may, within the next several weeks, start seeking court approval to take specific assets to the auction block, according to the report. The company is looking for buyers for its approximately 30 brands, 36 plants and other assets.
A Flowers spokesman didn't respond to the Wall Street Journal’s requests for comment.
Flowers already has been trying to fill in the geographic gaps in its business. It bought certain assets and the license to the Sara Lee and Earthgrains bread brands from Grupo Bimbo in California, where it previously didn't have a presence. Flowers has begun selling its Nature's Own bread in some markets in California now that it has a relationship with retailers there.