Wal-Mart Stores Inc. and Cincinnati-based Kroger Co. are among the bidders for assets being sold by Hostess Brands Inc., the bankrupt maker of Wonder bread and Twinkies, said a person familiar with the matter.
There are about two dozen bidders, said the person, who asked not to be named because the process is confidential. Last month, financial adviser Joshua Scherer of Perella Weinberg Partners LP said the liquidation sale may generate about $1 billion.
A few of the bids are for all the assets, some are for just the cakes or breads businesses, and others are interested in individual Hostess plants or products, according to the person. Other first-round bidders include Grupo Bimbo SAB and Alpha Baking Co., the person said.
The 82-year-old maker of Hostess CupCakes, Ding Dongs and Ho Hos said last month that it would liquidate and terminate more than 18,000 workers after failing to reach agreement with its striking bakers’ union on concessions to help it emerge from its second bankruptcy. Changes in American diets led to years of declining sales at Hostess, while ingredient costs and labor expenses climbed.
Separately, a Hostess union and a pension fund said they are appealing the court order that gave the bankrupt company permission to wind down.
U.S. Bankruptcy Judge Robert Drain, at a Nov. 29 hearing, approved Hostess’ requests to shut down and to pay as much as $1.83 million in incentives to 19 senior managers, while overruling objections to the bonuses.
The creditors are appealing the wind-down order, according to court papers filed by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the Bakery and Confectionery Union and Industry International Pension Fund.
Hostess, based in Irving, Texas, won final approval from Drain to sell its assets
Representatives for Hostess, Walmart, Kroger, Alpha Baking and Bimbo declined to comment on the auction process.
C. Dean Metropoulos & Co., the private-equity firm that owns Pabst Brewing Co., planned to submit a bid, said Daren Metropoulos, a principal at the Greenwich, Conn., firm. He didn’t respond to a request for comment.
A standoff with striking union workers triggered liquidation auctions of the Hostess brands, recipes, plants and other assets. The Bakery Confectionery union went on strike Nov. 9 after Drain imposed contract concessions opposed by more than 90 percent of the union’s members. The union represents more than 5,000 Hostess workers.
Hostess emerged from an earlier bankruptcy in 2009 as a private company controlled by buyout firm Ripplewood Holdings LLC and lenders. The company was previously known as Interstate Bakeries Corp. and changed its name to Hostess Brands in October of that year. Hostess entered its latest bankruptcy in January.