McKee Foods to buy Drake's business from Hostess
NEW YORK (Reuters) - Hostess Brands Inc said on Thursday that its Drake's snack cake business will be acquired by McKee Foods Corp, which had submitted a baseline bid of $27.5 million earlier this year.
Hostess, the maker of such iconic goods as Drake's, Twinkies and Wonder Bread, is liquidating after filing for bankruptcy last year, its second since 2004.
An auction for Drake's was canceled after no other qualified bids were submitted. McKee was the only qualified bidder to step up by Wednesday's deadline, according to a Hostess statement.
An auction for a handful of Hostess' bread brands, including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's, will go forward on Friday after the company received additional offers on top of a $30 million baseline bid from United States Bakery Inc.
A spokesman for Hostess on Thursday declined to name the additional bidders.
The majority of its snack cake business, including Twinkies, is scheduled to be sold for $410 million to Apollo Global Management (APO.N) and Metropoulos & Co. Most of its bread business, including Wonder Bread, will be sold to Flowers Foods Inc (FLO.N) for $360 million, while its Beefsteak bread brand will go to Grupo Bimbo (BIMBOA.MX) for $31.9 million.
Those sales are up for court approval on Tuesday at a hearing in U.S. Bankruptcy Court in Manhattan.
The Drake's sale, which includes Drake's Coffee Cake, Ring Dings, Devil Dogs and other products, is set for a hearing on April 9.
The bankruptcy is In re Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.