Pabst beer owner goes after Twinkies
The famous snack cake will likely be heading to auction within weeks. Will the new owners rekindle consumer interest?
The company, along with Apollo Global Management, another private equity shop, has submitted a "stalking horse" bid of $410 million for parts of Hostess Brands' snack business, including the iconic cream-filled sponge cake.
Hostess, which has filed for bankruptcy protection, is selling all its assets after failing to reach an agreement with one of the unions representing its employees. Bankrupt companies accept "stalking horse" bids to set a base floor for auctions and prevent other bidders from lowballing a purchase price.
The bid, which also covers other Hostess brands such as Ho Hos, Zingers and Suzy Q, includes five bakeries. Other companies will be allowed to make offers on the business, and the outcome will likely be decided by a bankruptcy court.
There has been an outpouring of nostalgia for Twinkies ever since Hostess declared bankruptcy. Unfortunately, many people with fond memories of the snack treat probably haven't bought them in years. As the Associated Press notes, Twinkies brought in $76.2 million in revenue in its last year, well under the $384.6 million Hostess made from CupCakes.
Metropoulos specializes in investing in underperforming consumer brands. The firm's holdings include Pabst, North America's largest privately held brewer, Chef Boyardee pasta dishes, Ghirardelli chocolates and Pam cooking spray. Apollo Global owns CKE Restaurants, the parent company of Carl's Jr. and Hardee's fast food restaurants.
--Jonathan Berr probably likes Twinkies a little too much. Follow him on Twitter @jdberr.
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