Twinkies, Wonder Bread auctions in weeks

Feb. 12, 2013 at 3:30 AM   |   Comments

IRVING, Texas, Feb. 12 (UPI) -- Hostess Brands Inc. is to auction its Twinkie and Wonder Bread brands and Drake's assets within weeks after a U.S. judge gave the OK, a company spokesman said.

The Wonder Bread auction is scheduled to take place Feb. 28, the Twinkie snack cake auction March 13 and auctions for Drake's assets -- including Ring Dings, Yodels and Devil Dogs -- March 15, a Hostess spokesman said.

U.S. Bankruptcy Judge Robert Drain in White Plains, N.Y., cleared Hostess Monday to move forward with auctions of several brands.

Drain plans to hold a sale hearing to approve the winning bids March 19, Drain said.

Private-equity firms Apollo Global Management LLC of New York and C. Dean Metropoulos & Co. of Greenwich, Conn., are the lead bidders for most of the Hostess cakes business, with a $410 million offer for brands such as Twinkies, Ho Hos and Ding Dongs, and Dolly Madison products including Zingers.

Their lead bid, or "stalking-horse" offer, worked out with Hostess to test the market ahead of the auction, also covers five bakeries and certain equipment, The Wall Street Journal reported.

McKee Foods Corp. of Collegedale, Tenn., maker of Little Debbie snack cakes, is the stalking-horse bidder for Hostess' Drake's brand, with a $27.5 million offer that doesn't include Drake's New Jersey plant, the Journal said.

Flowers Foods Inc. of Thomasville, Ga., and Tastykake maker Tasty Baking Co. of Philadelphia are the stalking-horse bidders in the auction for five Hostess bread brands, including Wonder and Nature's Pride, offering $360 million. Their bid includes other assets, including 20 bakeries.

A subsidiary of United States Bakery Inc. of Portland, Ore., better known in the Pacific Northwest as Franz Family Bakery, has offered $28.9 million for other Hostess bread brands, including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's. That bid also includes four bakeries, 14 depots and equipment.

The stalking-horse bids, which combined top $825 million, set the thresholds other suitors will have to exceed.

"[We] look forward to a robust auction process that will allow these iconic brands to continue and to maximize value for all of the company's stakeholders," Hostess Chairman and Chief Executive Officer Gregory Rayburn said in a statement last month.

Hostess of Irving, Texas, said in November it was shutting down and selling off its brands and plants after the wholesale baker and distributor, established in 1930, and its second-largest union failed to reach a deal on cost cutting.

The liquidation is expected to result in the loss of 18,500 jobs.

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