By Martinne Geller
Jan 25 (Reuters) - Hostess Brands Inc plans to
submit an agreement next week to sell its Drake's cake business
as part of its bankruptcy reorganization, a lawyer for the
company said on Friday.
Heather Lennox, an attorney for Hostess, told a court in
White Plains, New York, that Hostess was also in advanced
discussions with a number of parties for the remainder of its
snack business, which includes Twinkies, according to a
spokesman for Hostess.
Lennox also told the court that Hostess expects to file an
agreement for the other brands in the near term, according to
the spokesman, Thomas Becker.
It was not immediately clear who the agreements would be
with, but private equity firm C. Dean Metropoulos said earlier
this week that it was working on a deal for some Hostess brands.
"We continue to be very engaged in the bidding process,"
Daren Metropoulos, a principal at the firm, which also owns
Pabst Brewing Co, confirmed in an email. "We are working to get
a deal done."
Sources familiar with the situation have said that
Metropoulos is working with Apollo Global Management.
Apollo declined to comment on Friday. Metropoulos was not
immediately available.
Hostess shut down its baking business and is liquidating
assets after a strike by its baker's union crippled the
82-year-old company.
The sale of its assets, which range from Wonder Bread and
Ding Dongs to baking equipment and real estate, is being run by
bankers at Perella Weinberg, who have said they expected to pick
initial bidders, or "stalking horses," for various assets this
month.
According to so-called stalking horse deals, the bidders set
a baseline bid to acquire some of the bankrupt company's assets,
and are often entitled to a breakup fee if another buyer trumps
the offer later.
Earlier this month, Hostess chose Flowers Foods to
start the bidding at $390 million for its bread brands including
Wonder, Butternut, Home Pride, Merita and Nature's Pride brands.
The case is In re: Hostess Brands Inc et al, U.S. Bankruptcy
Court, Southern District of New York, No. 12-22052.
(Additional reporting by Greg Roumeliotis)
Follow us on Twitter @ReutersLegal | Like us on Facebook