* Flowers agreed to buy Wonder, Home Pride, other brands
* Purchase subject to higher bids at bankruptcy court
* Hostess in talks to sell Twinkies, other snack cakes
By Tom Hals and Jonathan Stempel
Jan 11 Flowers Foods Inc on Friday said
it has agreed to buy Wonder and other well-known bread brands
from Hostess Brands Inc for $390 million, as part of the latter
company's bankruptcy reorganization.
The Thomasville, Georgia-based company said it agreed to pay
$360 million for the Wonder, Butternut, Home Pride, Merita and
Nature's Pride brands, as well as 20 bakeries and 38 depots.
It also entered a second contract where it agreed to pay $30
million for the Beefsteak brand.
Flowers already owns brands such as Cobblestone Mill,
Nature's Own and Tastykake. It said it expects the purchases to
add to earnings in 2013, and that it would finance them with
cash on hand plus debt.
Gregory Rayburn, Hostess' chief executive, said the Irving,
Texas-based company remains in talks to sell its snack cake
business, including Twinkies and Drake's cakes, as well as its
remaining bread brands.
The Flowers purchase is subject to higher bids at a
court-supervised auction, and requires approval by regulators as
well as U.S. Bankruptcy Judge Robert Drain in White Plains, New
Hostess will ask that the auction take place on Feb. 28,
with a hearing to authorize a sale on March 5.
In winning the right to serve as the initial bidder in the
auction, Flowers beat out Grupo Bimbo SAB de CV, one
of the world's largest bakers, whose U.S. brands include
Entenmann's, Sara Lee and Thomas'.
Hostess said it chose the Flowers bids after its bankers at
Perella Weinberg Partners ran a bidding process that drew 169
prospective buyers, including 87 that signed confidentiality
Grupo Bimbo representatives did not immediately respond to a
request for comment.
Hostess in November decided to shut down its baking business
and liquidate after a strike by its baker's union crippled the
One of Hostess' bankers, Joshua Scherer, told Drain at a
November court hearing that the company's brands had drawn
"furious" buyer interest, including from national retailers.
Wal-Mart Stores Inc and Kroger Co are among
prospective buyers, according to media reports.
The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy
Court, Southern District of New York, No. 12-22052.