Flowers Foods set to buy Wonder bread: source
By Martinne Geller | February 28, 2013 5:21 AM EST
Flowers Foods Inc
Pending approval from a U.S. bankruptcy court judge, Wonder Bread, along with Butternut, Home Pride, Merita and Nature's Pride, will go to Flowers after no other bidder stepped up to make a competing offer, a source familiar with the matter said on Wednesday.
Shares of Flowers, which makes Nature's Own bread and Tastykake snacks, were up 5.5 percent in early afternoon trade, as the deal is expected to boost the company's margins and earnings.
Hostess, which is liquidating its business after 82 years, was set to run an auction on Thursday for the brands, 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
Bimbo bid $1 million more for the Beefsteak brand, though its $31.9 million bid includes a $900,000 breakup fee.
Hostess declined to comment. Flowers and Bimbo did not immediately return calls seeking comment.
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.
Flowers, founded in 1919 in Thomasville, Georgia, has grown over the years through a string of acquisitions. It was the one-time owner of well-known brands including Keebler Foods and Mrs. Smith's pies.
SunTrust Robinson Humphrey analyst William Chappell expects the Hostess deal to add at least 30 cents per share to Flowers' earnings once the brands are integrated. He expects to hear more about the company's estimates and strategy at a company-sponsored analyst meeting in New York next month. He has a "Buy" rating on the stock.
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, Matthew Lewis and Tim Dobbyn)
Most Popular Slideshows
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
- Chilling: New ISIS Video Addresses Australia; Aussie Teen Delivers Message
- The Pirate Bay Blockade: Cost Of Blocking Websites Like TPB Is Ridiculously High
- Xiaomi Mi4 And MiPad Prices Likely Slashed, Thanks To Rivals Oppo, OnePlus And Meizu
- Virginia Woman Who Posted Naked Image Of Ex-BF’s New Partner 1st Person Charged Under Revenge Porn Law
- No Mercy: ISIS, Father Stones to Death Daughter for Alleged Adultery
- Meizu MX4 Pro To Arrive In November In Black And White Colours, Features Higher Than QHD Display, Exynos 5430 SoC And 3 GB RAM
- iOS 8 Jailbreak Release Date is Doomed as Team Evad3rs Opts Out, Pangu Hits Snag – Report