Twinkies May Find Buyer, Hostess CEO Says
(NEW YORK) -- Hostess Brands, the maker of the iconic Twinkies snack cakes, may find a buyer when it heads to bankruptcy court on Monday to liquidate the 82-year-old company, the company’s CEO says.
“I think we’ll find buyers,” CEO Gregory F. Rayburn told ABC News on Sunday. ”A few have surfaced already since Friday expressing interest in the brand to acquire them.”
Con Agra and Flowers Foods are among the companies that have expressed interest in Hostess, but Mexican company El Grupo Bimbo may have an edge, the Christian Science Monitor reported Saturday. Grupo Bimbo, headed by Mexican billionaire Daniel Servitje Montull, is the largest bread-baking company in the world.
Economists say part of the reason Hostess struggled was due to high sugar tariffs meant to protect local producers, the Monitor reported. Grupo Bimbo could take advantage of lower sugar prices in Mexico.
Hostess makes Twinkies, popular snacks including Ho Hos, Ding Dongs, Suzy Qs and Sno Balls, and Wonder Bread.
Last week, the company announced it would close after it imposed wage and benefit cuts to its 18,000 workers, prompting a bitter nationwide strike.
“The problem has always been the cost structure, the union rules, the pension legacy, the pension cost and the cost structure,” Rayburn told ABC on Sunday.
On Friday, he announced the company would close, saying in a statement: “We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike. Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
The company’s sales had dropped over the years as mothers began swapping the fat-filled snack cakes and white bread with healthier choices. It filed for bankruptcy twice -- once in 2004 and again in January.
Over the weekend, Americans who were panicked over news of the company’s closure cleared the shelves of Twinkies. The cream-filled sponge cakes were in many cases re-offered for sale online at exorbitant mark-ups.
On eBay Sunday night, some ambitious sellers were listing the product for several hundred thousand dollars up to several million. One seller even offered a box of Twinkies for $15,000,000.
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