Hostess Brands Inc., the bankrupt maker of Twinkies snack cakes, received court permission to wind down its 82-year-old business on Thursday but revealed “furious” interest in its iconic brands from potential buyers.
New York Bankruptcy Court Judge Robert Drain approved the final orders that cleared the way for the company to begin selling its assets, everything from brands such as Ding Dongs and Twinkies to baking equipment and real estate.
“It’s undisputed they will be worth more moving down this path,” Judge Drain said of the wind-down plan.
Around 110 potential bidders have contacted the company about bidding for at least part of its business, and 70 had enough interest to sign confidentiality agreements, Hostess’s banker told the hearing in White Plains, N.Y.
Joshua Scherer of Perella Weinberg, who was hired by Hostess to sell its assets, said that six potential bidders have hired large investment banks to help them.
“It’s very significant because it indicates to me that not only are these buyers serious, but they are expecting to spend substantial sums,” said Mr. Scherer. He said the liquidation could raise $1-billion.
Mr. Scherer described the level of incoming calls from potential bidders as “fast and furious.” Interested parties include large national retailers and overseas buyers that wanted to bring Hostess brands to India, he said.
By early January, the company expects to have initial bids for its various brands, which will then be put to auction.
Money raised from the sale of assets will help Hostess repay its creditors. It has about $900-million of secured debt and faces up to about $150-million of administrative claims.
Mr. Scherer said last week that Hostess could be worth $2.3-billion to $2.4-billion in a normal bankruptcy, an amount equal to its annual revenue.
Hostess abandoned its initial plan to reorganize as an ongoing business and decided to liquidate on Nov. 16, saying it was losing about $1-million per day after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike a week earlier.
Mr. Drain expressed frustration with the bakers’ union earlier this month for striking. The union walked out after Mr. Drain authorized Hostess to impose pay and benefit cuts, which the International Brotherhood of Teamsters, Hostess’s largest union, had accepted.
His frustration burst into the open again on Thursday and he briefly shouted at the bakers’ attorney, Ancela Nastasi, after he questioned her approach in questioning witnesses.
“I have to wonder, again … what your clients’ basis is for whatever they are doing here. I just don’t get it,” he said.