Hostess Brands forged ahead with its dismantling plan on Monday, officially picking the maker of Little Debbie snacks as the lead bidder for its Drake’s brand.
Little Debbie’s parent, McKee Foods, has agreed to pay $27.5 million for the Drake’s brand, giving it the rights to sugary treats like Ring Dings, Yodels and Devil Dogs. As the “stalking horse†bidder, the company will set the floor price for a court-supervised auction scheduled for March 15.
The pact doesn’t include the Drake’s factory in Wayne, N.J. The fate of that facility, which a banker for Hostess said was the only kosher bakery plant in the country, is unclear, though the company is expected to continue trying to find a buyer. Hostess said in November that it would liquidates and sell off its assets.
Separately, Hostess said that it has picked United States bakery as the stalking-horse bidder for four of its bread products, including Sweetheart and Eddy’s. Those are separate from the longer list of brands tat Flowers Foods is in the pole position to buy.
To date, Hostess hasn’t named a lead bidder for its crown jewels: snack brands like Twinkies. A number of parties have expressed interest, people briefed on the matter have said previously, including the owner of Pabst Blue Ribbon; Apollo Global Management; and Grupo Bimbo of Mexico.
