Judge OKs Hostess Sale Plans
Published in CSP Daily News
Ruling clears way for Twinkies, Drakes, other auctions set for March
IRVING, Texas -- Hostess Brands Inc. won permission to place its bakery and snack cake brands on the auction block as it continues selling off its business, piece by piece, in bankruptcy, reported Dow Jones. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., Monday cleared the company to proceed with several of the sale processes it has been steadily unveiling over the past several weeks.
Private-equity firms Apollo Global Management LLC and Metropoulos & Co. are now officially set to as the stalking-horse bidder for most of the company's cakes business, including brands such as Dolly Madison, Ho Hos and Ding Dongs, with a $410 million offer. That bid also covers five bakeries and certain equipment.
McKee Foods Corp., the Collegedale, Tenn.-based maker of Little Debbie snack cakes, is the stalking horse bidder, for Hostess's Drake's brand. Its $27.5 million offer doesn't include Drake's New Jersey plant.
A subsidiary of United States Bakery Inc., a Portland, Ore., company also known as Franz Family Bakery, is offering $ 28.85 million for bread brands including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's. That bid also includes four bakeries, 14 depots and equipment.
The auction for the Twinkie assets will take place on March 13, according to a Hostess spokesman, and auctions for the Drake's assets and the four bread brands will take place on March 15. Judge Drain will consider signing off on the winning bidders at a sale hearing set for March 19.
Hostess last month won permission to auction off five of its major bread brands--including the classic Wonder Bread and healthier offering Nature's Pride--along with 20 plants and 38 depots. Flowers Foods Inc., the Thomasville, Ga.-based maker of Tastykakes and Nature's Own breads, is the stalking horse in that contest, offering $360 million. The auction is set to take place on Feb. 28 with a sale hearing to follow on March 5.
Hostess, based in Irving, Texas, last November announced it was shutting down and selling off its approximately 30 brands and 36 plants, a move expected to result in the loss of more than 18,000 jobs. Hostess moved to liquidate after it failed to reach a deal on cost cuts with its second-largest union, representing thousands of bakers.
Since then, Hostess has acummulated stalking-horse bids totaling more than $856 million, Lisa Laukitis, a Jones Day attorney representing Hostess, said in court Monday, according to Dow Jones.