Participation falls short of standard set by Rayburn
March 1, 2013
by Josh Sosland
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.