Participation falls short of standard set by Rayburn

by Josh Sosland
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IRVING, TEXAS — While buyers appear to have been successfully found for the bread business in the liquidation initiated by Hostess Brands, Inc., the process appeared to fall short of the “intense and competitive” bidding predicted by Gregory F. Rayburn, chairman and chief executive officer of Hostess.

Flowers Foods, Inc. on Feb. 28 announced its stalking horse bid for the largest Hostess bread brands and related assets had prevailed. The Flowers stalking horse bid for the Beefsteak rye brand was topped by Grupo Bimbo S.A.B. de C.V.

No higher qualified bids were received for the largest part of the business, paving the way for the Flowers $360 million stalking bid to prevail. In the case of its Beefsteak bid, Flowers said it chose not to increase its bid from $30 million after another buyer bid more. In neither case was an actual auction conducted on Feb. 28.

By contrast, Mr. Rayburn had predicted a “robust, court-authorized auction process.” In a statement after the stalking horse bids had been announced, Mr. Rayburn painted a picture suggesting numerous potential buyers vying for the Hostess Brands assets.

“We look forward to competitive auctions to further drive value for all of the company’s stakeholders,” he said.

Whether a larger number of bidders will emerge for the remainder of the Hostess bread business as well as its snack cake business remains to be seen.

Hostess will ask the U.S. Bankruptcy Court for the Southern District of New York to approve both transactions at a hearing on March 19.

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READER COMMENTS (2)

By Dave Walker 3/3/2013 1:34:03 AM
I ask everyone in the United States to boycott any chain or store that will carry,Hostess,Drake's,Wonder(I'm not sure of the other brands)because of the way they lied and stole from their employees. These brands should be buried with the Hostess name. Please buy private label made by your local bakery,and if your sweet tooth is yelling at you,go to the neighborhood bakery where the quality is second to none. People do not have the right to make money off of our backs. Thank You for the anticipated cooperation.

By Rt 3/1/2013 10:04:28 PM
Why sould we be surprise about how many buyers when Rayburn has lied to us along ??