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.
(Read More: The Fight to Buy Hostess: Main Street vs. Wall Street.)
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