Hostess Brands got final approval for its wind-down plans in bankruptcy court Thursday, setting the stage for its roster of snack cakes to find a second life with new owners - even as 18,000 jobs will be wiped out.
The company said in court that it's in talks with 110 potential buyers for its iconic brands, which also include Ding Dongs and Ho Hos. The suitors include at least five national retailers, such as supermarkets, according to a financial adviser for the company. The process has been "so fast and furious," Hostess hasn't been able to make the calls seeking buyers it previously intended, said Joshua Scherer of Perella Weinberg Partners.
"Not only are these buyers serious, but they are expecting to spend substantial sums," he said.
The update on the sale of the company's brands comes as Hostess seeks approval in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans. The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the liquidation process, which could take about a year.
The wind-down process includes the quick sale of Hostess brands, which also include Devil Dogs, Donettes and Wonder Bread. Hostess had already said last week that it was getting a flood of interest from potential buyers. The company has stressed that a quick sale is necessary to capitalize on the outpouring of nostalgia sparked by the company's liquidation.
"The longer these brands are off the shelves, the less they're going to be valued," Scherer said in a court Thursday. Last week, he had noted that it was a "once-in-a-lifetime opportunity" for buyers to snap up iconic brands without the burden of debt and costly labor contracts that would come with the purchase of Hostess as a company. Though Hostess sales have been declining over the years, they still come in at between $2.3 billion and $2.4 billion a year.