IRVING, Texas -- Flowers Foods Inc. and Grupo Bimbo SAB are in discussions to acquire pieces of Hostess Brands Inc.'s bread business, as the maker of Wonder Bread and Twinkies sells off assets and liquidates, said people familiar with the talks told The Wall Street Journal.
A spokesperson for Hostess told the newspaper that the company "expects to establish up to a half-dozen stalking-horse bids for substantially all of its assets."
The stalking-horse bids for the bread assets are on track to be disclosed as soon as Thursday, though the timing could change, said the person familiar with the matter.
Hostess could disclose Flowers, Grupo Bimbo or others as opening bidders in a looming bankruptcy-court auction for the assets as soon as this week, the sources said.
Hostess, whose bread brands include Wonder Bread, Nature's Pride, Home Pride, Merita and Butternut, is still determining how to split up assets and package them for buyers, one of the people said.
Hostess's bread brands could fetch more than $350 million. The bids are still being negotiated, so their final values and structures aren't yet determined.
Hostess's cake business, including the Twinkies brand, is expected to be sold later this year, and negotiations with possible buyers remain in early stages, this person said.
Hostess, based in Irving, Texas, in November announced that it was shutting down its business and selling off its 30 or so brands and 36 plants in a bankruptcy liquidation. The company had been attempting to reorganize in Chapter 11 but moved to a liquidation after it failed to reach terms with its second-largest union, representing thousands of bakers.
(See Related Content below for previous CSP Daily News coverage of the Hostess bankruptcy.)
The company reported $2.5 billion in revenue for fiscal year 2011. Its representatives have indicated they have received substantial interest in Hostess's brands and plants.
The company's bread brands are likely to be split into at least two groups for sale, with Flowers and Grupo Bimbo as leading contenders to reach deals to buy them subject to higher offers in a court-supervised auction, said the source.
Wal-Mart Stores Inc. and Kroger Co. are also interested in Hostess's bread brands but aren't expected to be opening bidders for them, the person said. Other, smaller companies are also in discussions with Hostess, the person said.
On Saturday, spokesmen for Grupo Bimbo, Kroger and Wal-Mart declined to comment. A spokesman for Flowers didn't immediately respond to a request for comment.
Flowers, the Thomasville, Ga.-based maker of Tastykakes and Nature's Own baked goods, has often been cited by analysts as a possible bidder for Hostess assets, as has Mexican baker Grupo Bimbo.
Hostess employed about 18,500 people before liquidating, and currently only has roughly 1,100 workers left helping with the wind-down.