Bankrupt Twinkies and Wonder Bread maker Hostess Brands says it expects to establish up to six ‘stalking horse’ bidders for its iconic bakery brands when bids are presented to the bankruptcy court.
A stalking-horse bid is an initial bid on a bankrupt company's assets from an interested buyer chosen by the bankrupt company from a pool of bidders that sets the bar so other bidders can't low-ball the purchase price.
Once the stalking horse has made its bid, other potential buyers may submit competing bids.
We expect to sell substantially all of the company’s assets through this means
Speaking to FoodNavigator-USA after weekend press reports said Flowers Foods and Grupo Bimbo were emerging as front-runners for parts of Hostess’ bakery empire, a company spokesman said:
“We expect to establish up to six stalking horse bidders and expect to sell substantially all of the company’s assets through this means.”
The first bids should be presented in court “sometime this month”, he said.
Asked if the bids would all be presented at once, he said: "It is more likely that the stalking horse bids will be presented to the court in chunks. How many, I can’t say.
"After stalking horse bidders are selected, the auction process takes several more weeks. The process will become much clearer once the company files its bid motions."
Flowers Foods and Grupo Bimbo reportedly in the running
According to the Wall Street Journal , Flowers Foods (which markets the Nature's Own, Cobblestone Mill and Sunbeam brands), and Grupo Bimbo SAB (which markets the Brownberry, Earthgrains, Sara Lee and Thomas' English muffins brands), are in the running to acquire several Hostess brands.
Hostess's stable of bread brands includes Wonder Bread, Nature’s Pride, Home Pride, Merita and Butternut.
Its snack cake brands include Twinkies, Ding Dongs and Ho Hos.
It also sells Devil Dogs, Funny Bones, and Yodels under the Drake's brand; and Dolly Madison cakes, which include Coffee Cakes and Zingers.