Hostess liquidation draws scores of potential bidders
By Tom Hals | November 30, 2012 9:28 AM EST
Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes, received court permission to wind down its 82-year-old business on Thursday but revealed "furious" interest in its iconic brands from potential buyers.
New York Bankruptcy Court Judge Robert Drain approved the final orders that cleared the way for the company to begin selling its assets, everything from brands such as Ding Dongs and Twinkies to baking equipment and real estate.
"It's undisputed they will be worth more moving down this path," Drain said of the wind-down plan.
Around 110 potential bidders have contacted the company about bidding for at least part of its business, and 70 had enough interest to sign confidentiality agreements, Hostess' banker told the hearing in White Plains, New York.
Joshua Scherer of Perella Weinberg, who was hired by Hostess to sell its assets, said that six potential bidders have hired large investment banks to help them.
"It's very significant because it indicates to me that not only are these buyers serious, but they are expecting to spend substantial sums," said Scherer. He said the liquidation could raise $1 billion.
Scherer described the level of incoming calls from potential bidders as "fast and furious." Interested parties include large national retailers and overseas buyers that wanted to bring Hostess brands to India, he said.
By early January, the company expects to have initial bids for its various brands, which will then be put to auction.
Money raised from the sale of assets will help Hostess repay its creditors. It has about $900 million of secured debt and faces up to about $150 million of administrative claims.
Scherer said last week that Hostess could be worth $2.3 billion to $2.4 billion in a normal bankruptcy, an amount equal to its annual revenue.
Hostess abandoned its initial plan to reorganize as an ongoing business and decided to liquidate on November 16, saying it was losing about $1 million per day after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike a week earlier.
Drain expressed frustration with the bakers' union earlier this month for striking. The union walked out after Drain authorized Hostess to impose pay and benefit cuts, which the International Brotherhood of Teamsters, Hostess' largest union, had accepted.
His frustration burst into the open again on Thursday and he briefly shouted at the bakers' attorney, Ancela Nastasi, after he questioned her approach in questioning witnesses.
"I have to wonder, again ... what your clients' basis is for whatever they are doing here. I just don't get it," he said.
The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Tim Dobbyn and Dan Grebler)
Most Popular Slideshows
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales
- Sony Xperia M2 vs. Moto G – Specifications, Features and Price Showdown