As most of you probably recall, last November Hostess Brands shutdown and went into bankruptcy. We had several threads on it:
- Obummer's America: Greedy Union Pigs May Kill Off Twinkies, Breitbart reports
- Wall Street Killed Twinkies – Not the Unions
- Which Hostess Brands product will you miss most?
Anyway how's it s going to be broken up and who will likely get it is becoming clear.
http://online.wsj.com/article/SB10001424127887323375204578271812419478982.html
There are four major chunks that have been announced, with stalking horse bids established for three of them and the fourth is being worked on now. (A stalking horse bid is one in which a someone has agreed to pay a certain amount for something, but it will still be subjected to an auction, in which case the stalker gets a fee for the breakup.)
Flowers Foods, wants Wonder Bread and some other bread brands, about half of the bakeries and a few of the distribution centers.
United States Bakery want some of the minor bread brands, and a few bakeries and distribution centers. (It's main interest is likely in the bakeries it is getting. The brands are probably being snapped up to keep a competitor from restarting them.)
McKee Foods. the maker of Little Debbie snacks wants Drake's, which is an odd yet understandable combination. McKee is a family-owned firm and the family is Seventh-Day Adventist. Drake's had the only large-scale commercial kosher bakery in the US. McKee wants the equipment, but not the bakery itself. Partly because they apparently have the space elsewhere, but also their Virginia plant which they intend to produce the goods at in in a right-to-work state, which New York is not. I think they'll probably do well with Drake's, since they are likely to see kosher as a plus rather than as an obstacle like Hostess did. It also appears that McKee intends to position Drake's as a premium brand compared to their own.
Last but not least, a pair of private equity firms are teaming up for a joint bid for the Hostess, Dolly Madison, and other snack brands and they might pick up the bakery that McKee passed on since it was also being used to make Hostess products for the Northeast.
In summary, it looks like that most of the bakeries will be reopening soon, but most of the distribution centers will never reopen. So the bakers have a decent shot at getting their jobs back, but the drivers have poor prospects, which helps explain why the bakers were obstinate while the teamsters were as meek as lambs. I expected there to be less interest in the bakeries, but it appears I was wrong about that.
Anyway, if things go well, people may be able to break their Lenten fasts with fresh Twinkies!
