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By Martinne Geller
NEW YORK Jan 29 Private equity firms Apollo
Global Management LLC and C. Dean Metropoulos & Co are
near a deal to buy snack cake brands including Hostess Twinkies
and Donettes, two sources familiar with the matter said on
A deal for roughly $400 million, part of Hostess Brands
Inc's bankruptcy process, could be announced as soon
as Tuesday, said one of the sources, who declined to be
identified as the discussions are not public.
The so-called stalking horse bid by the private equity firms
would serve as the baseline offer for the business, which also
includes Dolly Madison bread and Hostess cupcakes. It could
still be topped by others at an auction.
Dean Metropoulos, No. 360 on the Forbes 400 list of
America's wealthiest people, is a packaged foods veteran who was
once the joint owner of brands such as Duncan Hines baking
mixes, Vlasic pickles and Swanson frozen dinners. In 2010, his
firm bought Pabst Blue Ribbon beer, the no-frills brew popular
with young East Coast hipsters.
His son Daren, a principal at the firm, confirmed earlier
this month that they were working on a bid. Neither Daren, nor a
spokesman for Apollo were immediately available to comment on
Tuesday. Hostess declined to comment.
Apollo, founded by banker Leon Black, has invested in
consumer companies before, including in CKE Restaurants and
Claire's Stores Inc.
Hostess was granted permission by a U.S. bankruptcy court
judge in November to wind down its business and liquidate its
assets after a strike by a baker's union crippled the
82-year-old company's operations.
The sale of assets, which range from Twinkies and Wonder
bread to real estate and baking equipment, is being run by
Perella Weinberg Partners. The lead banker on the sale, Joshua
Scherer, has said there was great interest from many parties in
Earlier this month, Hostess chose a $390 million offer by
Flowers Foods, maker of Tastykake products, as the
stalking horse bid for several brands including Wonder bread.
On Monday, Hostess said it chose McKee Foods Corp, maker of
Little Debbie snack cakes, as the initial bidder for its Drake's
cakes, which include Ring Dings, Yodels and Devil Dogs. It also
chose United States Bakery as the lead bidder for four of its
smaller bread brands plus bakeries, equipment and depots.
Hostess also filed a motion on Monday to stop paying retiree
benefits to its former employees, saying that its lenders only
agreed to fund the benefits through February 2013 due to a delay
in the appointment of a retiree committee.
(Reporting By Martinne Geller in New York; Editing by Gerald E.
McCormick, Bernard Orr)