BATTLE CREEK, Mich. -- Post Foods LLC has joined several suitors making nonbinding bids to acquire Hostess Brands and its Twinkies snack cakes for approximately $2 billion, a source close to the situation told The New York Post.
Grupo Bimbo, Flowers Foods and Swiss-based Aryzta AG also made offers by the deadline, sources said.
Aryzta, far from a household name in the United States, is a big player in foodservice and owns Otis Spunkmeyer cookies, so it can envision some synergies with Hostess.
A few private-equity firms also made offers, but do not seem very interested because of the competition from the strategic players, said the report.
Just two years after buying the Hostess snack cake business for $410 million, owners Apollo Global Management and billionaire C. Dean Metropoulos are looking to flip the maker of Twinkies, Donettes, Ho Hos, Ding Dongs and other snack brands for a high multiple.
They maintain a new owner can take the brand they bought out of liquidation and build revenue from its current $650 million level to near the $1 billion it attained before Hostess collapsed into Chapter 11 bankruptcy in January 2012.
“They are making a big point about how the business still has a long way to go,” a source told the newspaper.
Preliminary offers value Hostess at around $2 billion, a 10x EBITDA multiple, sources said.
Flowers Foods, with a $5.6 billion value when including equity and debt, likely needs Hostess the most, sources said.
“If it loses Hostess to Bimbo [the world’s No. 1 baker], it is a big problem,” a source told the paper.
Flowers has not shown interest in teaming with a private-equity firm and would likely issue shares to fund an acquisition, two sources said.
Suitors invited into the second round will take approximately the next six weeks to study the business before making binding offers, the report said.
Post Foods submitted an unsuccessful bid for Hostess assets during the bankruptcy and its view of the popular bakery has not changed, a source said.
Battle Creek, Mich.-based Post Foods' portfolio of brands includes Honey Bunches of Oats, Pebbles, Great Grains, Post Shredded Wheat, Post Raisin Bran, Grape-Nuts, Honeycomb and other cereals and Post Goodness-To-Go shakes.
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