Hostess Brands said on Friday that it has picked Flowers Foods as the lead bidder for most of its bread brands, a group of names that includes onetime staples like Wonder Bread.
Under the terms of its bid, Flowers will pay up to $ 360 million for the brands and other assets, including 20 bakeries. The company was also selected as the lead bidder for Hostess’s Beefsteak bread line, with an initial offer of $ 30 million.
Flowers was designated a “stalking-horse” bidder, meant to establish a baseline for bids in an auction that is scheduled to begin on Feb. 28.
The naming of Flowers as the initial bidder will begin the first auction of brands by Hostess, which filed for liquidation in late November after struggling with nearly $ 1 billion in debt and labor costs it called onerous.
The auction doesn’t include Hostess’s more prominent snack brands, like Twinkies, Ho Hos and Ding Dongs. Those will be auctioned off separately, and have drawn interest from scores of potential bidders.
Even the bread products, which include Nature’s Pride and Merita, involved talking to 169 potential suitors, 87 of whom signed confidentiality agreements, Hostess said in a statement.
“We are pleased with the Flowers offers and look forward to a robust auction process that will allow these iconic brands to continue and to maximize value for all of the company’s stakeholders,” Gregory F. Rayburn, Hostess’s chairman and chief executive, said in a statement. “We also continue to negotiate with parties interested in purchasing our snack cake business and remaining bread brands and expect to select additional stalking horse bidders as soon as reasonably practicable.”
Flowers, a regional bakery company based in Thomasville, Ga., has long been considered a potential bidder for at least some of the failed food company’s assets. It already owns a number of products like Tastykakes, whose maker it rescued in 2011.
Others that had expressed interest in Hostess’s bread products include Grupo Bimbo, a Mexican baking giant that owns Arnold bread and Entenmann’s pastries, and retailers like Wal-Mart Stores and Kroger, according to a person briefed on the matter.