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Twinkies buyers hungry for more Hostess cakes, makes offer for Drake's
NEW YORK, N.Y. - The new buyers of Twinkies apparently developed a sweet tooth for Hostess snack cakes.
Apollo Global Management and Metropoulos & Co., which made a joint offer to snap up the famous cream-filled cakes, have also entered the contest to buy Drake's, which include Devil Dogs and Yodels, according to a source who requested anonymity because the sale process is private.
The fresh offer poses a challenge to McKee Foods, the maker of Little Debbie cakes. Hostess had previously picked McKee's $27.5 million offer as the "stalking horse" bid for Drake's that set the floor for an auction. The deadline to submit competing offers was 5 p.m. EDT Tuesday.
The offer for Drake's from Apollo and Metropoulos still needs to be reviewed to determine whether it qualifies, according to the source. If not, the auction on Friday would be cancelled and McKee would be picked as the buyer.
Representatives for Hostess and McKee Foods declined to comment.
Representatives for Apollo and Metropoulos were not immediately able to comment. Apollo's investments include fast-food chains Carl's Jr. and Hardee's. Metropoulos owns Pabst beer.
The two investment firms were already selected by Hostess as the buyer for Twinkies, Ding Dongs, Ho Hos and other Hostess cakes after nobody stepped forward to top its $410 million offer, according to a filing in bankruptcy court Monday.
In reference to that deal, Metropoulos & Co. CEO and founder Dean Metropoulos said in a statement that the firm was looking forward to having "America's favourite snacks back on the shelf by this summer."
A spokesman for Hostess said the company had no comment on the lack of competing bids for Twinkies and the other Hostess cakes. Previously, Hostess CEO Greg Rayburn had predicted the competition for those cakes would be "wild and wooly."
Hostess previously picked Flowers Foods as the buyer for Wonder and other major bread brands; no competing offers were made in that case either. The sale of the breads and Twinkies still need to be approved in bankruptcy court on March 19.
Hostess, based in Irving, Texas, stopped making its cakes and breads in late November after it announced it was going out of business and closing its plants following years of financial struggles.
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Follow Candice Choi at www.twitter.com/candicechoi
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