What will become of our beloved Twinkies? The latest turn is aWall Street Journal report that the first bidder for most of Hostess' cake business could be a private equity tag-team comprised of Apollo Global Management LLC and C. Dean Metropoulos & Co.
If so, the story is hardly over yet. Whoever gets the first bid may not be the one who ends up getting Hostess.
That's because the Apollo and Metropoulos bid would be what's known as a "stalking horse bid," that merely sets the ground floor price for the auction, and for which they would receive fees from Hostess for doing the due diligence and groundwork preparation.
"We are working diligently to get a deal done," Daren Metropoulos, a principal at the private equity firm of the same name, told Bloomberg this morning. "It would be a tremendous opportunity to resurrect these legendary brands and bring them back to the consumer."
Hostess spokesman Tom Becker declined a TODAY request to comment on the Journal's report. Neither Apollo nor Metropoulos could be reached for comment.
The bankrupt cake maker is asking for the court to hold the auction on February 28. The judge will rule on that request at a hearing on January 25.
On January 11, Flowers Food agreed to become the opening bidder for Wonder and Hostess' other well-known bread brands for #60 million, along with its Beefsteak brand for $30 million.
The iconic Hostess Brands, which brought such fabled treats as Twinkies, Ding Dong's and HoHo's to American bellies, and the sticky fingers that went along with them, since 1930, filed for bankruptcy on Nov. 16, 2012. The cake-maker blamed its demise on the November 9 strike by the Bakery, Confectionary, Tobacco and Grain Millers Union that the company said brought operations to a halt, and their ensuing inability to reach a new labor agreement with the union. On Nov. 21, a bankruptcy judge approved the motion. That day, the CEO laid off over 15,000 workers.
It was an ignoble ending for a company that occupies a firm place in the American consumer identity. Twinkies is a cultural touchpoint, the source of jokes about how the packaged treats would survive the apocalypse. It was also the basis for the infamous "Twinkie defense" that got accused 1979 political assassin Dan White's sentence reduced from pre-meditated murder of San Francisco city supervisor and gay activist Harvey Milk to voluntary manslaughter. His lawyers successfully argued that their client's junk food diet was evidence of the depression that drove him to kill.
Interest in Hostess' broad portfolio of name-brand cake and bread products has been intense, with big chains, international investors, and other bakery companies all vying for a piece, Heather Lennox, a Hostess attorney said at the November hearing. While Hostess' ultimate fate remains uncertain, what's clear is that the brands will live on in some fashion to bring smiles, and dabs of sugar, to American mouths for yet more generations still.