Hostess Brands has received a "flood of inquiries" from a range of parties interested in buying several of its brands, the snack cake maker's lawyer said on Wednesday.
In a hearing in U.S. Bankruptcy Court in the Southern District of New York, the lawyer, Heather Lennox of Jones Day, said Hostess expects to find "stalking horse" bidders for some brands within a few weeks, with court-supervised auctions to follow.
More than 50 parties have signed non-disclosure agreements in their negotiations with Hostess, a company advisor said. Hostess has been approached by regional bakers, national competitors, customers, financial parties, consumer product companies, and international buyers, Reuters reported.
Hostess is seeing "very intense competition" for its brands, Lennox said. "These are iconic brands that people love."
Though no bidders were named, Flowers Foods, maker of maker of Nature's Own bread and Tastykake snack cakes, said on Monday it has amended and extended its $500 million loan facility, giving it greater financial flexibility just as its bankrupt rival Hostess entertains bidders for its brands.
Hostess expects to find "stalking horse" bidders for some brands within a few weeks, with court-supervised auctions to follow, Lennox said.
Earlier this year, Hostess received six bids for whole company, but none of them was actionable, Reuters said. The process was launched in the summer to see if the company could sell individual brands to assist in funding to exit Chapter 11 bankruptcy protection.
Hostess could be worth $2.3 billion to $2.4 billion in normal bankruptcy protection, roughly equal to its annual revenue, but watchers expect the company to come at a discount because plants have been closed.