Wal-Mart Stores, Kroger, Alpha Baking and Grupo Bimbo are seeking to acquire the assets that are being divested by Hostess Brands, the bankrupt producer of bakery products.
The auction has attracted about 24 bidders. While some bidders are seeking to acquire the complete business, others are planning to buy a part of the business - such as the brands, the facilities or the cakes/bread businesses, reported Bloomberg citing a source with knowledge of the matter.
Hostess Brands, which has been affected by increasing debts, soaring labour costs and the changing tastes of consumers, filed for bankruptcy in January 2012 for the second time in its history, declaring assets of $982m and debt of $1.43bn.
In November, the company received approval from the US Bankruptcy Court in New York to close its business and sell its assets, a move which will lead to a loss of 18,500 jobs.
Judge Robert Drain authorized the liquidation process after Hostess Brands and the Bakery, Confectionary, Tobacco and Grain Millers Union (BCTGM) were unable to resolve their differences during a mediation session, which was aimed at saving the company.
