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WHITE PLAINS, N.Y. -- Hostess Brands Inc. was back in U.S. Bankruptcy Court for the Southern District of New York in White Plains, N.Y., Friday morning detailing its path to liquidation. Lawyers for the company revealed that separate buyers have emerged for its iconic brands.
According to the Associated Press, the company said it is narrowing the bids it received for its brands, and expects to sell off its snack cakes and bread brands to separate buyers. A likely suitor has emerged for the namesake Hostess brand, which includes Twinkies, Ding Dongs and Ho Hos, along with Dolly Madison cakes, which includes Coffee Cakes and Zingers, said Joshua Scherer of Perella Weinberg Partners.
He also explained than another viable bid was made for Drake's cakes, which includes Devil Dogs, Funny Bones and Yodels. That bidder also wants to buy the Drake's plant in Wayne, N.J., which Scherer said is the country's only kosher bakery plant.
Additional bids have been submitted for its bread brands, which include Wonder and Home Pride. Hostess expects to file binding "stalking horse" bids for many of its brands in January, followed by a four-week auction process to allow competing bids. Closings for many brands could come as soon as mid-March, Scherer said.
Hostess, based in Irving, Texas, has said potential buyers include major packaged food companies and national retailers, such as big-box retailers and supermarkets. The company has stressed it needs to move quickly in the sale process to capitalize on the outpouring of nostalgia sparked by its bankruptcy, the AP said.
Scherer declined to comment on how the brands were expected to sell for, the news outlet reported.
Hostess got the go-ahead to begin shutting down its operations right before Thanksgiving after talks between the company and the Bakery, Confectionary, Tobacco and Grain Millers Union broke down. The baker's union went on strike Nov. 9, which led Hostess to move forward with bankruptcy plans on Nov. 16. Hostess had asked its employees to agree to an 8-percent pay cut, a 20-percent increase in health care costs, closure of 10 to 12 plants and changes to pension and workday provisions, as CSNews Online previously reported. Hostess received the final OK late last month to sell its assets and cut approximately 18,000 jobs. The liquidation sale of Hostess is expected to generate upwards of $1 billion.
Shopper intelligence firm Monroe, Conn.-based Spire LLC has charted the daily sales of Hostess products the week prior and the week after the company's bankruptcy announcement and found that, on the day of the bankruptcy notice, Hostess baked goods experienced a dramatic sales spike, with Twinkies earning a record-breaking, one-day sales reach of $49 per store.
Overall, however, Hostess sales did not increase from the week before to the week after the announcement, as retailers ran out of product and could not meet the heightened demand from consumers.