US bakery firm Flowers Foods could be set to acquire Twinkies and other Hostess assets following the liquidation of the firm.
Whilst $2.8 billion turnover Flowers has not publicly stated its interest, it has renegotiated its lending terms which, according to The Wall Street Journal, could be a sign that the company is about to release funds to make an offer. Last week, Hostess said that it had received a “flood of offers” for its brands and other assets including 36 production sites across the US.
Flowers factories are reportedly operating under capacity after an expansion of its private-label business failed to meet expectations. Some analysts believe that the capacity surplus could make a bid more attractive.
“If Flowers were to buy some Hostess snack cakes, it would help them utilise their excess production capacity," Amit Sharma, an analyst at BMO told the Journal.
Flowers has also acquired Earthgrains bread brands in California from Grupo Bimbo and paid $175 million for Tasty Baking Co in an attempt to improve the geographical spread of its business. Hostess cake and bread products could further Flowers’ US expansion plans.
The firm is not expected to rehire Hostess staff if it is able to agree a deal.
Other companies who have stated an interest in Hostess’ assets include private equity firm Sun Capital Partners, liquidation specialists Great American Group and beer brand owner C Dean Metropoulos & Co.
