Flowers Foods’ $360 million stalking-horse bid for the majority of the bread brands and assets of Hostess Brandsfailed to draw any competing qualified bids at yesterday’s auction for the assets, according to reports from numerous publications.
The brands included in the deal are Butternut, Home Pride, Merita, Nature’s Pride, and Wonder, and the purchased assets feature, among other things, 20 bakeries and 38 depots.
Flowers’ $30 million bid for the Beefsteak brand, however, looks like it may face competition. Citing unnamed sources, several outlets, including Bloomberg and the Associated Press, reported that Groupo Bimbo had submitted a competing bid for the brand. An auction is slated for today.
Hostess has so far generated roughly $856.4 million in stalking-horse bids for its various bread and snack cake brands and related assets, including in addition to the Flowers’ bids, a $410 million joint bid for its snacks cake business from Apollo Management and Metropoulos & Co.; McKee Foods’ $27.5 million bid for the Drake’s brand snack cake business, which includes Yodels, Devil Dogs and Yankee Doodles; and United States Bakery’s $28.85 million bid for the company’s so-called “Northwest bakeries business assets,” which includes the Sweetheart, Eddy’s, Standish Farms, and Grandma Emilie’s bread brands and facilities in Alaska, Montana, Utah, and Washington, along with depots in Idaho, Montana, North Dakota, Utah, and Washington.
Auctions for those brands and assets are scheduled for March 13 (snacks cake business) and March 15 (Drake’s and Northwest bread assets).
Hostess has speculated that the final prices for its brands and assets, including about $100 million of remaining assets for which the company has not obtained stalking-horse bids, could exceed a total of $1 billion.
In particular, Hostess has high hopes for its snacks cake business, which includes the iconic Twinkies brand. In announcing the Apollo/Metropoulos staking-horse bid for the business, CEO Greg Rayburn told CNBC, “[i]nterest in these iconic brands has been intense and competitive and we expect that to continue through a robust, court-authorized auction process,” adding that he expected the “auction on the cake side – the Twinkie side – to be wild and wooly.” – Alan Zimmerman