THOMASVILLE, GA. — The position of Flowers Foods, Inc. as stalking horse bidder for most of the bread related assets of Hostess Brands, Inc. assures Flowers a breakup fee if another buyer emerges as the successful bidder. What could truly give Flowers a “leg up” in its bid for the Hostess assets, though, may be its head start in working toward gaining regulatory approval.

Announcing it had signed a purchase agreement to acquire 20 baking plants and most of the leading bread brands of Hostess, Flowers said it “would expect to close the transactions shortly following court approval if it is selected as the winning bidder.” The company goes on to note the transactions are subject to regulatory clearance, which would include antitrust review under the Hart Scott Rodino Antitrust Improvements Act.

In a 2009 article in Antitrust magazine, published by the American Bar Association, Malcolm R. Pfunder said stalking horse bidders have the ability to file preregistration notification under the H.S.R. Act before the auction is completed. The article by Mr. Pfunder, now retired from the Washington law firm of Gibson, Dunn and Crutcher, suggests that the waiting period under H.S.R. for approval of a Flowers/Hostess transaction or for the request of additional information, may be well under way already.

“A stalking horse bidder typically files its H.S.R. Act notification early, and completion of that review is part of the stalking horse’s advantage in the process, since other bidders generally will have to include an H.S.R. condition and a corresponding regulatory out in their purchase offers,” Mr. Pfunder said.

Under the H.S.R. ACT, the government (the Federal Trade Commission and/or the Department of Justice) normally has 30 days to respond to a preregistration filing. Additionally, the government normally may ask for additional competitive information, triggering a second 30 day waiting period after the information is submitted, a merger may be consummated.

In the case of a bankruptcy sale, those periods are shortened considerably — 15 days for the initial waiting period and 10 days after the additional information is submitted. As a result, it is possible in the case of a Flowers filing that both waiting periods will have expired before the auction takes place Feb. 25, as is currently planned. Still unknown, though, would be whether Flowers would able to resolve any competitive issues raised by the government and how long that process would take. In the case of the acquisition by Grupo Bimbo S.A.B. de C.V. of the North American fresh bakery business of Sara Lee Corp., a full year elapsed before a settlement was reached.