Hostess is moving forward with the sale of Devil Dogs, Yankee Doodles and Yodels to the maker of Little Debbie cakes.
The Associated Press
The bankrupt company said it picked McKee Foods as the buyer for the Drakes cakes after nobody stepped forward with a qualifying bid to top its $27.5 million offer. There were reports that the rival partnership that is buying Twinkies and some other Hostess snack cakes was putting together a bid for Drakes, but ultimately it didnt qualify.
The auction scheduled for today will be canceled as a result, according to a filing in bankruptcy court. A hearing to approve the sale is scheduled for April 9.
McKee Foods, based in Collegedale, Tenn., isnt projecting when it plans to have the cakes back on shelves.
McKee Foods is a family-owned bakery, similar to how Drakes was established as a family bakery 125 years ago, CEO Mike McKee said in a statement. We have generations of experience in baking, and we will strive to bake the Drakes cakes, not just for taste and quality, but also to deliver on the memories of the loyal Drakes fans.
Separately, Metropoulos & Co., which is teaming up with Apollo Global Management to buy Twinkies and other Hostess cakes such as CupCakes, Ding Dongs and Ho Hos, said it hopes to have the cakes back on shelves by this summer.
Hostess Brands Inc. had also canceled auctions for Twinkies and its major breads after nobody stepped forward with competitive offers for those brands. Flowers Foods was picked as the buyer for the breads, including Wonder. Grupo Bimbo, which makes Thomas English muffins, was picked to buy its Beefsteak bread. A hearing to approve those sales is set for Tuesday.
The company plans to go ahead with an auction for its Sweetheart, Eddys, Standish Farms and Grandma Emilies breads on March 15. United States Bakery was chosen as the lead bidder for those brands for $30 million. That includes four bakeries and other equipment.
Hostess closed its factories in late November after a strike by its second-biggest union. The company had been struggling financially for years.