Grupo Bimbo SAB (BIMBOA) won an auction to buy bankrupt Hostess Brands Inc.’s Beefsteak bread brand, beating an initial bid by Flowers Foods Inc. (FLO:US) with a $31.9 million offer.
Grupo Bimbo, the Mexico City-based maker of Sara Lee products, Entenmann’s cakes and Thomas English Muffins, topped Flowers’ $30 million opening offer for the rye-bread brand yesterday, Hostess said in a statement. No rivals challenged Flowers’ $360 million bid for the majority of Hostess’s bread- making business, including its Wonder brand, and an auction planned for yesterday was canceled.
“The proposed sales will result in significant proceeds for the benefit of the company’s stakeholders and ensure the beloved bread brands can continue to be enjoyed for years to come,” Hostess Chief Executive Officer Gregory F. Rayburn said in the statement.
The company is scheduled to seek bankruptcy court approval to sell the assets to the auction winners at a March 19 hearing. Hostess, founded in 1930, is liquidating after failing to reach an agreement with striking bakers on concessions to help the company emerge from its second bankruptcy.
Keith Hancock, a spokesman for Flowers, didn’t immediately respond to an e-mail yesterday seeking comment on its winning bid. David Margulies, a spokesman for Grupo Bimbo, declined to comment.
Flowers, based in Thomasville, Georgia, will get Hostess’s Wonder, Butternut, Home Pride, Merita and Nature’s Pride brands, 20 bread plants, 38 depots and other assets. The company, established in 1919, produces and markets packaged baked goods for retail and food-service customers under brands including Nature’s Own and Tastykake.
Hostess will sell more bread and snack-cake brand assets this month, including Twinkies, with initial offers totaling about $466.4 million, according to court documents. Rayburn said Jan. 31 that so-called stalking-horse bids total about $858 million with about $100 million more for sale.
Apollo Global Management LLC (APO:US) and C. Dean Metropoulos & Co. have offered about $410 million for the Hostess snack-cake business, which includes Dolly Madison brands, five bakeries and equipment. Bids for the March 13 snack-cake auction must be submitted by March 11.
Leon Black’s Apollo, based in New York, managed $109.7 billion in assets as of Sept. 30. Metropoulos, based in Greenwich, Connecticut, is the private-equity firm that owns Pabst Brewing Co.
McKee Foods Corp., maker of Little Debbie snacks, made a bid of $27.5 million for the Drake’s brand. United States Bakery Inc. offered to buy the Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s bread brands, four bakeries and 14 depots, plus certain equipment, for about $28.9 million. Both initial offers will be tested at March 15 auctions. Bids are due by March 12 for both auctions.
Previously known as Interstate Bakeries Corp., Hostess left an earlier bankruptcy in 2009 under the control of buyout firm Ripplewood Holdings LLC and lenders. The company, based in Irving, Texas, entered bankruptcy again in January 2012.
The case is In re Hostess Brands Inc., 12-22052, U.S. Bankruptcy Court, Southern District of New York (White Plains).
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