Apollo, Metropoulos near deal for Hostess Twinkies: source

NEW YORK, Tue Jan 29, 2013 — Private equity firms Apollo Global Management LLC and C. Dean Metropoulos & Co. are near a deal to buy snack cake brands including Twinkies from bankrupt Hostess Brands Inc, according to a source familiar with the matter.

A deal, part of Hostess’s bankruptcy reorganization, is not yet final, said the source, who declined to be identified as the discussions are not public.

The so-called stalking horse bid would be for more than $400 million, according to the Wall Street Journal. It would serve as the baseline offer for the business and could be topped by others at an auction.

Spokesmen for Metropoulos and Apollo were not immediately available to comment. Hostess declined to comment.

Earlier this month, Hostess chose a $390 million offer by Flowers Foods, maker of Tastykake products, as the stalking horse bid for several brands including Wonder bread.

On Monday, Hostess said it chose McKee Foods Corp, maker of Little Debbie snack cakes, as the initial bidder for its Drake’s cakes, which include Ring Dings, Yodels and Devil Dogs. It also chose United States Bakery as the lead bidder for four of its smaller bread brands plus bakeries, equipment and depots.

 

 

New York banker Gordian Group to advise Hostess’ bakery union

NEW YORK, Mon Jan 21, 2013 — The union and pension fund for Hostess Brands Inc. HTBRS.UL has hired Gordian Group, an investment bank specializing in distressed cases, to help preserve jobs and workers’ benefits at the bankrupt maker of Twinkies snack cakes as Hostess negotiates with buyers.

New York-based Gordian, which has no institutional loyalties to funds or bondholders in Hostess, will provide conflict-free advice for the welfare of the company’s workers, The Bakery and Confectionery Union and Industry International Pension Fund (Bakers Fund) said.

Mexico’s Grupo Bimbo and a partnership between Apollo Global Management and veteran food executive C. Dean Metropoulos are among the leading candidates to buy Hostess Brands Inc.’s snack cake brands, according to three people familiar with the matter.

In a separate announcement earlier this month, Hostess said Flowers Foods agreed to pay $390 million for Hostess’s Wonder and other bread brands, including Nature’s Pride and Butternut. That sale is still subject to a court-supervised auction.

The Bakers Fund said it intended to hold direct discussions with the bidders for Hostess and had chosen Gordian to advise it on the basis of the investment bank’s track record in distressed financial situations.

“The Bakers are here to work with bidders in any way as our sole goal is to maximize jobs and pension benefits for our members,” said David Durkee, who is chairman of the Bakers Fund.

Twinkies maker Hostess plans to go out of business

IRVING, Texas, Fri Nov 16, 2012 – Hostess Brands Inc., the bankrupt maker of Twinkies and Wonder Bread, said it had sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.

Hostess, which has about $2.5 billion in sales from a long list of iconic consumer brands of snack cakes and breads, said it had suspended operations at all of its 33 plants around the United States as it moves to start liquidating assets.

“We’ll be selling the brands and as much of the infrastructure as we can,” said company spokesman Lance Ignon. “There is value in the brands.”

Hostess said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities, and it had no choice but to give up its effort to emerge intact from bankruptcy court.

The Irving, Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs.

Hostess had given employee a deadline to return to work on Thursday, but the union held firm, saying it had already given far more in concessions than workers could bear and that it would not bend further. Union officials blamed mismanagement for the company’s woes.

The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.

Hostess has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature’s Pride, Dolly Madison, Drake’s, Butternut, Home Pride and Merita, but it is probably best known for Twinkies – basically a cream-filled sponge cake.

“We do not have the financial resources to weather an extended nationwide strike,” CEO Gregory Rayburn said in a statement. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

Hostess Brands returns to bankruptcy over pensions

IRVING, Texas ― Twinkies and Wonder Bread maker Hostess Brands Inc. filed for bankruptcy protection for the second time in less than three years, after failing to reach an agreement with workers on pension and health benefits.

Hostess’ declining financial performance, crippling legacy costs associated with its pension plans and massive debt levels led the company to Chapter 11 bankruptcy, court papers showed on Wednesday.

The company, which has about $860 million in debt, said it does not expect disruptions in the manufacturing and delivery of its products during the bankruptcy process.

To reorganize itself, the company must withdraw from multiemployer pension plans, address legacy health and welfare costs and secure new capital to modernize its production and distribution operations, Hostess said.

The company had total assets of $981.6 million and liabilities of $1.43 billion as of Dec. 10, 2011.

Hostess said it has secured $75 million in debtor-in-possession financing from its existing lenders led by Silver Point Capital LP.

The privately held company said it had made efforts to sell its businesses and other M&A alternatives, including reaching out to companies such as Smuckers, Kraft, Blackrock, KKR and others without any success.

Hostess, founded in 1930, operates around 36 bakeries and employs about 19,000 people, a majority of whom are members of 12 unions.

“We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees,” Chief Executive Brian Driscoll said in a statement.

Hostess, formerly known as Interstate Bakeries Corp., had first filed for bankruptcy protection in 2004 in Missouri and emerged from it in February 2009 with private equity firm Ripplewood Holdings and other lenders taking control.