Wal-Mart Bid On Hostess Bankrupt Company Assets
Wal-Mart Stores Inc. is among the bidders for assets being sold by Hostess Brands Inc., since the former maker of Twinkies and Wonder bread went bankrupt and had to close their doors, according to Bloomberg news Friday.
Last month, financial adviser Joshua Scherer of Perella Weinberg Partners LP said the liquidation sale may generate about $1 billion and now a source close to the dealings told Bloomberg there are about two dozens bidders involved in the process. Among them is Kroger Co. and Alpha Baking Co. The insider added that some bidders are after assets while others want part in the cakes or breads businesses, or individual Hostess plants or products.
Fox News reported one of the companies seeking ownership is El Grupo Bimbo, the largest bread-baking company in the world based in Mexico. The acquisition of Hostess Brands will add to the list of well-known U.S. companies owned in part by Bimbo, which include Thomas' English Muffins, Sara Lee and Entemann's.
A bankruptcy court granted Hostess permission in November to begin the process for the 82-year-old company to sell assets, and proceeds will help repay company creditors. Hostess has about $900 million of secured debt and faces up to about $150 million of administrative claims, according to Reuters.
A failed meditation between Hostess Brands Inc. and the Bakery, Confectionery, Tobacco Workers and Grain Millers International (BCTGM) Union is blamed for the downfall of the company. The union members, which represented more than 5,000 Hostess workers, did not agree to an 8 percent cut in wages.
Around 18,000 jobs were lost, according to the Chicago Tribune. The bankruptcy also resulted in the closing of 33 bakeries, 565 distribution centers and 570 outlet stores.
Back in November, Gregory Rayburn, CEO of Hostess Brands, said he was confident that the company will attract biders. During an interview with ABC News, he said, "I think we'll find buyers. A few have surfaced already since Friday expressing interest in the brand to acquire them."
