Hostess in talks to sell bread brands, newspaper reports
BY AP Wire Service
Sunday, January 06, 2013
1/06/13 at 6:29 AM
NEW YORK (AP) - The makers of Thomas' English muffins and Tastykake snacks are emerging as two of the bidders for Wonder Bread and other Hostess bread brands as the company tries to sell off its assets under bankruptcy-court oversight, a newspaper reported Saturday.
The Wall Street Journal said Hostess Brands Inc. could reveal as early as this week that Flowers Foods Inc. and Grupo Bimbo SAB are in discussions to acquire the bread brands, which also include Nature's Pride. The report said the brands could command $350 million.
Grupo Bimbo's brands include Arnold breads, Thomas' English muffins and Entenmann's cakes. Flowers Foods Inc.'s brands include Nature's Own breads and Tastykake snacks.
Hostess sells Twinkies, Ding Dongs and Ho Hos, along with Dolly Madison cakes, which includes Coffee Cakes and Zingers. Hostess also sells Devil Dogs, Funny Bones and Yodels under the Drake's brand.
Hostess, which is based in Irving, Texas, announced in November that it was shutting down its business and selling its bread, snacks and cakes brands, along with its 33 bakeries and other operations, including a plant at 1111 S. Sheridan Road in Tulsa.
The company's demise came after years of management turmoil and turnover. Workers said the company failed to invest in updating its snack cakes and breads. Hostess filed for its second Chapter 11 bankruptcy in less than a decade last year, citing steep costs associated with its unionized workforce.
The company was able to reach a new contract agreement with its largest union, the Teamsters, but the bakers union rejected the terms and went on strike Nov. 9. A week later, Hostess announced its plans to liquidate, saying the strike crippled its ability to maintain normal production. In 2011, the company's revenue was $2.5 billion.
Hostess declined to comment, as did Grupo Bimbo's U.S. division, Bimbo Bakeries USA. Bimbo's parent company is headquartered in Mexico. A message left with Flowers Foods, which is based in Thomasville, Ga., was not immediately returned.
The liquidation of the company will ultimately mean the loss of 18,000 jobs, not including those shed in the years leading to the company's failure.
Original Print Headline: Reports: Hostess in talks to sell its bread brands