Flowers Foods reportedly is top bidder for Hostess breads
02/27/2013 9:18 PM
05/16/2014 9:18 PM
Wonder bread is one step closer to returning to school lunchboxes.
Flowers Foods Inc., maker of packaged bakery foods, won the bidding for the majority of the bread-making business of Hostess Brands Inc., including Wonder, according to Associated Press and Bloomberg News reports.
Both quoted sources saying Flowers, based in Thomasville, Ga., will pay about $360 million for Hostess’s Wonder, Butternut, Home Pride, Merita and Nature’s Pride brands, 20 bread plants, 38 depots and other assets after no other competing offers were submitted.
An auction will still be held Thursday for a separate $30 million bid by Flowers for the Beefsteak rye bread brand. A source said a competing offer for that brand was submitted by Mexico’s Grupo Bimbo, which makes Thomas’ English muffins and Entenmann’s cakes.
Any sales would be subject to approval by a bankruptcy court on March 19.
Hostess operated a bread plant in Lenexa and a bun plant in Boonville, Mo. Conrad Boos, a business agent for the Bakery, Confectionery, Tobacco Workers and Grain Millers union, said many members who worked at those now-closed plants are likely to apply to work there again if Flowers reopens the plants.
“We’re the only ones who can get them back up and running again immediately,” Boos said.
The union represented about 100 production workers at the Lenexa bread and bun plant and about 60 at the Boonville bun plant.
Boos said union members recognize that they’re not likely to be re-employed under organized labor contracts and that pay scales are likely to be lower than what they earned with Hostess.
“But the difference is that individuals can choose to go with Flowers or not,” Boos said. “They’ll know what they’re getting into. That’s a big difference from having negotiated things stolen from you. With Interstate Bakeries, they backed out of things promised us.”
Flowers and Bimbo didn’t immediately return calls or emails seeking comment.
Flowers, established in 1919, produces and markets packaged baked goods for retail and food service customers. The company’s top brands are Nature’s Own and Tastykake.
Taken together, Hostess has said its six bread brands generated just under $1 billion in sales last year, with Wonder bread accounting for about half of that. Flower, which generates about $3 billion in annual sales, has said it expects the deals to add to its earnings this year. The company plans to finance the deal through a mix of cash and debt.
Hostess, founded in 1930, is liquidating after failing to reach an agreement with striking bakers on concessions to help the company emerge from its second bankruptcy. Auctions for other assets will be held on March 13 and March 15.
Previously known as Interstate Bakeries Corp. and based in Kansas City, Hostess left an earlier bankruptcy in 2009 under the control of buyout firm Ripplewood Holdings LLC and lenders.
The company, which moved to Irving, Texas, from Kansas City, entered bankruptcy again in January 2012.
Hostess has also picked opening bidders, known as a “stalking horse,” for its snack cakes, in an auction Hostess CEO Greg Rayburn said should be “wild and woolly.”