Hostess gets go-ahead to auction snack cake brands
Feb. 12, 2013
WHITE PLAINS, N.Y. — Hostess Brands, Inc. has been granted approval by Judge Robert Drain of the U.S. Bankruptcy Court in White Plains to proceed with the sale of its snack cake brands and other assets.
In issuing his ruling, Judge Drain said Hostess has articulated “good and sufficient reasons” for selling off its assets.
The deadline for submitting a qualified bid is March 11, and the auction for the Twinkie assets is set for March 13. Currently, private equity firms Apollo Global Management L.L.C. and Metropoulos & Co. have a stalking horse bid of $410 million for most of the company’s cakes business, including brands such as Twinkies, Dolly Madison, Ho Hos and Ding Dongs. That bid also covers five bakeries and certain equipment. If no other qualifying bids are received, no auction will be necessary.
The auction for the Drake’s assets, which will begin with a $27.5 million stalking horse bid from McKee Foods Corp., Collegedale, Tenn., is set for March 15, as is the auction for the Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s bread brands. Portland, Ore.-based United States Bakery Inc. has the opening bid of $28.85 million for the latter four bread brands.
At the auctions, participants (including Apollo Global Management L.L.C., Metropoulos & Co., McKee Foods and United States Bakery) will be permitted to increase their bids. Bidding on the bread and snack cake business assets will begin at the purchase price and terms proposed in the baseline bids, and will proceed afterward in increments of $1 million.
Judge Drain will consider signing off on the winning bidders at a sale hearing set for March 19.
In late January, Judge Drain ruled that Hostess may proceed with plans to sell its major bread brands in an auction with Flowers Foods, Inc. as the stalking horse bidder. With the approval, qualified bids must be submitted by 5 p.m. on Feb. 25, and an auction will be conducted at 10 a.m. Feb. 28. Objections to the sale taking place must be submitted by 4 p.m. Feb. 25, and a hearing about the sale will be held March 5.