Breaking News from CNBC's Kayla Tausche: Grupo Bimbo Wins Beefsteak Bread from Hostess -- Source
Following is breaking news from CNBC's Kayla Tausche. Here is a link to the article: http://www.cnbc.com/id/100507650. All references must be sourced to CNBC.
BANKS, INVESTING, MARKETS, WALL STREET, FLOWERS FOODS INC, BUSINESS NEWS
By: Kayla Tausche, General Assignment Reporter
CNBC.com | Thursday, 28 Feb 2013 | 1:11 PM ET
In a bankruptcy auction carried out Thursday at law firm Jones Day, Mexico's baking giant Grupo Bimbo placed the winning bid for Beefsteak, one of Hostess' bread brands, for $31.9 million, according to a person familiar with the matter.
Previously, Thomasville, Ga.-based Flowers Foods had been tapped as the leading bidder with a $30 million offer. At that time, Grupo Bimbo bid higher, but its proposed deal carried a hefty break-up fee, paid to Bimbo, that may have deterred other bidders.
The auction is the latest move by Hostess to offload its various business units after a bankruptcy judge approved a liquidation of the company after it failed to reach an agreement with its unions in 2012.
On Wednesday, Flowers was named the winning bidder for the rest of Hostess' five bread brands — including Wonder Bread, Nature's Pride, and Merita — as well as 20 bakeries and various other assets. The bid stood at $355 million — plus an additional $5 million for certain licensing agreements — and remained unchallenged ahead of a proposed auction, sources said. Flowers Foods stock rose as much as 4 percent on the news in intraday trading Wednesday.
In March, marquee Hostess brands like Twinkies and Ding Dongs will be auctioned in a similar, court-sanctioned process. If all the sales close this spring, production of the brands could begin again around June, a person familiar with the matter has said.
—By CNBC's Kayla Tausche; Follow her on Twitter: @KaylaTausche
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