Flowers Foods Inc is set to buy Hostess bread brands including Wonder bread for $360 million after no other bidder stepped up to make a competing offer, a source familiar with the matter said on Wednesday.
The bankrupt bakery company was set to run an auction on Thursday for the brands, which also include Butternut, Home Pride, Merita and Nature's Pride, but there will be no auction since there were no other bids, the source said.
There will be an auction for the Beefsteak brand, for which Flowers bid $30 million, since Hostess received a higher bid from Mexico's Grupo Bimbo , said the source, who declined to be named as the process is private.
Bimbo bid $1 million more for the Beefsteak brand, though its $31.9 million bid includes a $900,000 breakup fee.
The deal with Flowers is still subject to approval by a bankruptcy court.
Flowers agreed in January to be the "stalking horse" bidder, which set a floor for the bidding and was subject to a court-supervised auction.
Hostess declined to comment. Flowers and Bimbo were not immediately available to comment.
Hostess expects to run two more auctions next month. One would be for the Hostess snack cake brands, including Hostess Twinkies and Dolly Madison, for which private equity firms Apollo Global Management LLC and C. Dean Metropoulos & Co set the bidding at $410 million.
The other would be for its Drake's cake business and additional bread brands. So far, McKee Foods, maker of Little Debbie snack cakes, offered $27.5 million for Drake's, which includes Ring Dings, Yodels and Devil Dogs.
United States Bakery Inc, also known as Franz Family Bakery, agreed to pay $28.85 million for the Sweetheart, Eddy's, Standish Farms and Grandma Emilie's bread brands.
(Reporting by Martinne Geller in New York; editing by Soyoung Kim and Matthew Lewis)