A little over a week after Hostess Brands formally announced its plans to wind itself down, the bankrupt maker of Twinkies and Devil Dogs is dealing with more interest from potential buyers than it can handle.
Advisers to the Hostess are in active talks with about 110 suitors, ranging from regional bakeries up to national supermarket chains, an investment banker for the company said in federal bankruptcy court for the Southern District of New York on Thursday. In perhaps a more reassuring sign, many of these suitors appear ready to spend big amounts of money.
Since Hostess won interim approval from a judge to begin selling off its stable of junk-food brands, the company has been bombarded by a flurry of calls.
“To be honest, it's been so fast and furious that we haven't had time to make all the outbound calls we've wanted to,†the banker, Joshua Scherer of Perella Weinberg Partners, testified.
At least a half-dozen potential buyers have retained what Mr. Scherer described as “large bank advisers,†a promising sign that they are preparing to spend “substantial sums†of money.
Among those that have expressed interest are 25 regional bakeries, five national supermarket chains and at least two overseas companies interested in securing distribution rights to Hostess products in India and other countries, he added.
Some potential buyers were touring Hostess facilities on Thursday, Mr. Scherer added.
Hostess is seeking final approval of its liquidation plan, which would see off Ding Dongs, Ho Hos and Drake's coffee cakes to new homes. Some interested buyers, such as the investment firm Sun Capital Partners and the company that owns Pabst Blue Ribbon beer, have publicly disclosed their desire for parts of the business - including in some cases all of Hostess.
Sales of the company's brands could exceed $1 billion, Mr. Scherer said. He added that he expected initial bids to come in by early to mid December. A so-called “stalking-horse bidder,†which would set the floor for an auction, would likely be picked by mid-January.
