Hostess stock offering priced at $15.25 per share

by Josh Sosland
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A public stock offering of about 20.1 million shares of Hostess Brands, Inc. Class A common stock has been priced at $15.25 per share.

KANSAS CITY — A public stock offering of about 20.1 million shares of Hostess Brands, Inc. Class A common stock has been priced at $15.25 per share.

Selling stockholders include funds managed by affiliates of Apollo Global Management, L.L.C., selling approximately 18.7 million shares; Gores Sponsor L.L.C., selling approximately 900,000 shares; and an entity controlled by C. Dean Metropoulos, selling approximately 500,000 shares.

The offering underwriters will have a 30-day option to purchase up to an additional approximately 3 million shares from the selling stockholders on a pro rata basis.

Hostess is not issuing additional shares in connection with the offering and will not receive proceeds from the sale of shares by the selling stockholders in the offering. The offering was expected to settle April 18.

Credit Suisse and Morgan Stanley are acting as joint book-running managers for the offering and as representatives of the underwriters. Barclays, Deutsche Bank Securities, RBC Capital Markets and UBS Investment Bank are also acting as joint book-running managers for the offering.

The $15.25 share price represents a 7.5% discount to the all-time high for Hostess shares of $16.48 per share, set March 15. The offering price is up 27% from the $12 price prevailing when Hostess Brands shares first began trading on the Nasdaq exchange following a November 2016 acquisition by Gores Holdings, Inc.

The latter company acquired Hostess in November 2016. Following the November transaction, funds managed by Apollo and C. Dean Metropoulos and family owned a 42% combined stake in Hostess.  With their sale of about 22.1 million shares, the Apollo/Metropoulos holdings declined to about 20% of the outstanding shares. 
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