Jan 28 Hostess Brands Inc is close to securing initial bids for its Drake's cakes business and four bread businesses that could net the bankrupt bakery company more than $50 million, according to a source familiar with the matter.
The deals, part of the company's bankruptcy reorganization, could be announced on Monday, according to the source, who declined to be identified as the talks are not public.
McKee Foods, maker of Little Debbie snack cakes, is expected to offer roughly $27 million for Drake's, which makes Devil Dogs, Ring Dings and Yodels, said the source, noting negotiations were ongoing so the final price could change.
United States Bakery Inc, also known as Franz Family Bakery, is expected to bid about the same amount for Hostess bread brands including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's, according to the source.
Hostess and McKee declined to comment. An official at Franz was not immediately available.
The bids, known as stalking horse bids, set baseline offers for the assets and are still subject to auctions.