BIDDEFORD – A U.S. bankruptcy court in New York has now approved the proffered bids for most of the now-defunct Hostess Brand’s assets, including the plant in Biddeford, which was purchased by Flowers Foods, along with five Hostess bread brands.
Keith Hancock, spokesman for Flowers Foods, said this week that while his company is “pleased with the outcome of the bankruptcy court review in which our bid was approved, this process is not over.”
He said Flowers must await regulatory review for its purchase of the bread brands and for 20 former Hostess plants, including the one in Biddeford. And he would not say what Flowers plans to do with the 20 plants it has acquired, including whether all or only some would reopen.
“We anticipate completing the transaction in the second half of the year,” Hancock said. “(But) because the transaction is not finalized, and for competitive reasons, it would be inappropriate at this point for us to share any specific plans regarding the pending acquisition.”
The Biddeford plant employed some 370 workers, who were laid off when Hostess Brands ceased operating.
In a press release issued this week, George E. Deese, chairman of the board and chief executive officer for Flowers Foods, said, “The Hostess assets fit well with our long-term growth strategy. This is an amazing time for Flowers Foods. Our long-term commitment to investing in bakeries, constantly improving efficiencies, delivering quality and the best customer service and building strong brands is paying good dividends for us.”
In all, Deese said that Flowers Foods’ year-to-date sales are up between 20 and 25 percent.
“We are adding new customers and locations, and we believe we are maximizing the opportunities available to us,” he added. “We have strong brands, great products, and a seasoned team – all factors that give me confidence in Flowers’ ability to meet or exceed our goals.”
According to a report in the Wall Street Journal, with the bankruptcy court’s approval of the various bids for Hostess Brands products, some of its most popular cake and bread brands, like Twinkies, could be back on store shelves by summer.
The majority of Hostess cake brands, including Ho Hos, Ding Dongs and Twinkies, have gone to Apollo Global Management LLC and Metropoulos & Co., for about $410 million, the Wall Street Journal said.
Flowers paid $360 million for the five bread brands – Wonder, Nature’s Pride, Merita, Home Pride, and Butternut. The Mexican bakery Grupo Bimbo purchased another line of rye breads, marketed under the name Beefsteak, for $31.9 million.
The Wall Street Journal said that Metropoulos & Co., which also owns the Pabst Blue Ribbon beer brand, plans to have the baked-goods brands its buying back on store shelves soon, according to spokesman Mark Semer, who said consumers could be eating Hostess treats by summer.
Hostess attempted to reorganize itself under a Chapter 11 bankruptcy filing, which it first made in early 2012, but by November of last year the company was facing a strike by one of its largest unions – the Bakery, Confectionery, Tobacco Workers and Grain Millers International – and instead asked the court for permission to liquidate all its assets.
That liquidation included 30 or so of the company’s iconic brands, along with 36 plants and a number of retail outlets. While most of its assets were cleared for purchase last week, the Wall Street Journal said that on April 9 Hostess will seek permission from the court to sell its Drake’s brand of coffee cakes and other treats to Little Debbie, which submitted an unchallenged bid of $27.5 million.
Although the sale of Hostess’ assets has brought in $860 million so far, it’s unclear whether the company will be able to raise enough money to repay the $1.03 billion to $1.04 billion it owes to secured creditors, the Wall Street Journal said.
Meanwhile, according to the Wall Street Journal, the baker’s union, which initially objected to the sale of Hostess’ assets, withdrew its protest late last week after the company changed the wording in its sale agreements to state that, “nothing extinguishes the buyers’ obligations to organized labor.”