By Martinne Geller and Olivia Oran
Jan 28 (Reuters) - Hostess Brands Inc said on Monday it has
selected stalking horse bidders for its Drake's cake business
and additional bread brands that will net the bankrupt bakery
company more than $56 million.
The announcement of the bidders comes as part of the
company's bankruptcy reorganization.
McKee Foods, maker of Little Debbie snack cakes, is offering
roughly $27 million for Drake's, which makes Devil Dogs, Ring
Dings and Yodels.
United States Bakery Inc, also known as Franz Family Bakery,
is expected to bid about the same amount for Hostess bread
brands including Sweetheart, Eddy's, Standish Farms and Grandma
These "stalking horse bids" set baseline offers for the
assets and are still subject to auctions.
Earlier this month, Hostess chose Flowers Foods Inc to start
the bidding at $390 million for its bread brands including
Wonder, Butternut, Home Pride, Merita and Nature's Pride.
Still outstanding is Hostess's iconic Twinkies brand. The
company's lawyer said last week that Hostess was in advanced
discussions with a number of parties for the remainder of its
snack business, including Twinkies.
Hostess received court permission to wind down its
82-year-old business in November after a strike by a bakery
union crippled its operations. The company is liquidating assets
- everything from bakery brands to equipment to real estate.
McKee Foods, a privately held company based in Collegedale,
Tennessee, is best-known for its Little Debbie cakes, which are
named after the granddaughter of founders O.D. and Ruth McKee.
The company currently offers more than 150 varieties of Little
With seven bakeries in the Northwest, Franz already produces
breads, rolls and cookies under its own name as well as Holsum
Hearth and Seattle International.
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