SALON

Thursday, Jan 31, 2013 3:45 PM UTC

Hostess picks lead bidders for Twinkies

By

Topics: From the Wires,

NEW YORK (AP) — Hostess has picked a lead bidder for its famous Twinkies.

The bankrupt company said late Wednesday that it has selected a joint offer from two investment firms — C. Dean Metropoulos & Co. and Apollo Global Management LLC — as the lead bid for its Twinkies and other snack cakes.

Hostess says the two are teaming to on $410 million bid for the snack-cake business and five bakeries.

The “stalking horse” bid would set the floor for an auction process that lets competitors make better offers. A judge would have to approve any final sale. In an interview on CNBC Thursday morning, Hostess CEO Greg Rayburn said he expects the auction for the cakes to be “wild and wooly.” Twinkies and other cakes could return to shelves during the back-to-school season, he said.

After years of management turmoil and turnover, Hostess declared in November it was going out of business and selling its brands. The company already announced separate lead bidders for its other brands including Drake’s cakes and Wonder bread.

The offer sets the stage for the return of Twinkies and other Hostess cakes to supermarket shelves under new management, which could mean stepped up marketing for the spongy yellow cakes with mysterious cream filling. Although supermarkets saw a run on Twinkies when news hit in November that Hostess was going out of business, the company’s sales had been declining amid changing tastes and a lack of investment in marketing.

In bankruptcy proceedings, Hostess has stressed that it needs to move quickly in the sale of its brands to capitalize on the outpouring of nostalgia and media coverage prompted by its demise. The longer the cakes and breads are off shelves, the more people will become accustomed to eating cakes and breads by rivals, the company has said.

Still, Hostess cakes generated significant sales to the end. For its final year, Twinkies pulled in about $76.2 million, according to Hostess. Hostess Donuts brought in $384.6 million and CupCakes brought in $138.1 million. The figures exclude sales at Wal-Mart Stores Inc.

Hostess Brands Inc., based in Irving, Texas, has been filing the bids for its brands in stages. Flowers Foods Inc., which makes Tastykakes and a variety of breads, was picked as the lead bidder for six of Hostess’ major bread brands, including Wonder.

United States Bakery Inc. was picked as the lead bidder for a number of smaller bread brands.

Hostess had been making its second trip through bankruptcy reorganization last year and hired Rayburn as a turnaround expert. Rayburn announced in November that the company would have to shut down after workers at its second biggest union went on strike and the company couldn’t reach a deal on a new contract.

The shuttering means the loss of roughly 18,000 jobs in total. Hostess has said the wind down is expected to take about a year, with the company retaining top management during that time to see through the process.

On Monday, the company requested in a bankruptcy filing to stop making payments to its retiree benefits as of Feb. 28. It had already stopped making contributions to employee pensions in August 2011.

___

Follow Candice Choi at www.twitter.com/candicechoi

More By Candice Choi.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

vote
Slave descendants seek equal rights from Cherokee Nation
60 points61 points | 3 comments
vote
Oklahoma senator who voted against federal funding for Hurricane Sandy victims: Tornado aid “totally different” from Sandy aid
39 points40 points | comment
vote
"Apparently, we have deserving and undeserving disasters, Oklahoma senators James Inhofe and Tom Coburn explain"
29 points30 points | 2 comments
vote
Obama opposes GOP bill on Keystone XL oil pipeline: The White House said Tuesday that the bill “seeks to circumvent longstanding and proven processes” by removing a requirement for a presidential permit. The legislation also says no new environmental studies are needed.
22 points23 points | 2 comments
vote
"Slave descendants seek equal rights from Cherokee Nation": long, detailed narrative of legal and historical complications in red-white-black relations
21 points22 points | comment

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations