They're still making twinkies in Canada. So if you need a fix, find a Canuck friend.
I've only ever had one, in my entire life. I wouldn't miss them if they disappeared but I do feel for the employees. I hope a new company comes in and saves the day.
Both takes are exceptionally reductive. Let's look at Wall street first. The private equity guys will likely lose most of their investment, since their stake in the company will be worthless. It's also not clear that the hedge funds and other lenders that supplied Hostess with its mountain of loans will fare much better. When it entered Chapter 11 this year, the company owed around $935 million, if you include the additional loan it took out to keep the lights on and creme flowing. Meanwhile, Reuters reports that the company listed $981.6 million worth of assets in its bankruptcy filing. There's virtually no chance they'll sell for that much in a liquidation. One of the failed bids to buy the whole company out of its last bankruptcy valued it at just $580 million. And that was when it was a going operation. If you factor in the interest payments Hostess has been making on its loans, some of the creditors might end up making out ok. But it doesn't seem likely anybody will make a killing.
How many times have Hostess Brands been in and out of bankruptcy in the last 20 years? I can think of at least two times from the top of my head. Poor management, that's all.
And apparently, union goons in this case who don't think ahead believe that no job is better than a job. I guess the bakers just want more dough.
The hell with Hostess (although I will will miss their creme filled cupcakes) and the horrendous Little Debbie plasti-treats, the real tragedy is that Hostess bought Drakes and so Yankee Doodles, Devil Dogs, and little crumb cakes will, apparently, be no more.
C. Dean Metropoulos & Co., the private equity firm that owns Pabst Brewing Co., is considering an offer to buy Hostess Brands Inc., which said today it plans to liquidate its business.
“Our family would love to purchase these iconic brands,” said Daren Metropoulos, a principal at the Greenwich, Connecticut-based firm, which paid $250 million for Pabst in 2010. “We are actively pursuing this deal as no doubt strategics will also.”
C. Dean Metropoulos, founder of the firm, has specialized in purchasing struggling brands, such as Chef Boyardee and Bumble Bee Tuna and turning them around. The firm paid close attention to the maker of Twinkies and Wonder Bread during its bankruptcy proceedings, Daren Metropoulos has said.
“We have analyzed this opportunity very carefully for a few years now,” Metropoulos said in an e-mail. “Shedding the complications of the unions and old plants makes it even more attractive.”
The 82-year-old company also makes Hostess CupCakes, Ding Dongs and Ho Hos. The private equity firm is “fully prepared to participate in any process involving selling the brands,” Daren Metropoulos said.
Hostess said today it will fire more than 18,000 workers and liquidate after a nationwide strike by bakery workers crippled operations. The company struggled after changes in American diets led to years of declining sales while ingredient costs and labor expenses climbed.
The company, based in Irving, Texas, plans to sell its products until supplies are exhausted. The decision to liquidate capped a weeklong standoff between Hostess, once the largest U.S. wholesale baker, and a union that called its proposed labor contract “horrendous.”
Grupo Bimbo, which owns the Arnold brand of bread and is currently the number one bread company in the U.S., would likely be banned from making a bid because of antitrust concerns, according to one of the bankers. Flowers Foods, the second largest U.S. bread company, could conceivably buy some of the bread division’s regional assets and operations in order to expand its Midwest operations, the banker said. Flowers owns the Nature’s Own brand of bread
In a bankruptcy filing earlier this year, Hostess assessed the value of its trademarks and intellectual property at around $135 million. If the near-panic among junk food aficionados is any indication, it should be able to sell the brands easily.
Although it will be remembered for taking a hard line at the end, Hostess isn’t a typical union-busting employer. The website of consulting firm Gephardt Group — founded by former U.S. Rep. Richard Gephardt, a longtime friend of organized labor — lists Hostess as a client.
Some people are trying to assign white or black hats to the strikers in this saga, but neither variety of head wear really fits.
These aren’t noble workers who “have bravely taken a stand against the corporate race to the bottom,” as AFL-CIO President Richard Trumka said in a statement. Nor are they ungrateful louts who deserved to lose their jobs, as some right-wing commentators have implied.
They’re simply human beings who got caught in a conflict and couldn’t find a way out. For that failing, labor and management must share the blame