Judge Approves Sale of Bankrupt Hostess Twinkies, Wonder Bread
Apollo rates as one of the winning bidders; meanwhile, Hostess heads to April 9 hearing for approval to sell its Drakes assets
A New York judge approved bankrupt Hostess Brands Inc.’s sale of some of its assets, including Twinkies and Wonder bread on March 19, according to reports.
Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York approved acquisitions from private equity firms Apollo Global Management and C. Metroupolos & Co. for Twinkies and other cake assets, as well as bread purchases by Flowers Foods Inc. and Grupo Bimbo SAB de CV.
Apollo and C. Metroupolos bid $410 million for Twinkies, Mini Muffins, Cup Cakes Ho Hos, Zingers and Suzy Q’s. The firms were named winning bidder on March 12 after no other qualified bidders came along, according to court papers.
Flowers, which makes Tastykakes, won Wonder bread and the company’s other primary bread assets with a $360 million bid. Hostess didn’t receive any other qualified bids for those assets, either.
Grupo Bimbo won the Beefsteak bread brand assets for $31.9 million, topping Flowers’ original $30 million bid, court documents show.
Hostess is heading to a sale hearing for its Drakes assets, including Yodels and Devil Dogs, on April 9. McKee Foods Corp., maker of Little Debbie brand snacks, is set to secure the assets with a $27.5 million bid.
Hostess operated 36 bakeries, 565 distribution centers, 5,500 delivery routes and 570 bakery outlet stores when it sought bankruptcy protection on Jan. 11, 2011. Founded in 1930, it was one of the largest wholesale bakers and bread distributors in the U.S.
The company decided to wind down operations after failing to resolve issues with its striking bakers union. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and other unions started striking on Nov. 9, 2012,which caused Hostess to lose between $7.5 million and $9.5 million in a few weeks, the company said in court papers. The strike came after troubled negotiations over the workers’ collective bargaining agreements.
Jones Day is debtor counsel. Kramer Levin Naftalis & Frankel LLP is counsel to the committee of unsecured creditors.
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