Hostess in talks to sell bread brands

NEW YORK (AP) — The makers of Thomas'

English muffins and Tastykake snacks are emerging as the two of the

bidders for Wonder

Bread and other Hostess bread brands as the company tries to sell

off its assets under bankruptcy-court oversight, a newspaper

reported Saturday.

The Wall Street Journal said Hostess Brands

Inc. could reveal as early as next week that Flowers Foods Inc. and

Grupo Bimbo

SAB are in discussions to acquire the bread brands, which also

include Nature's Pride. The report said the brands could command

$350 million.

Grupo Bimbo's brands include Arnold breads, Thomas' English muffins and Entenmann's cakes. Flowers Foods Inc.'s brands include

Nature's Own breads and Tastykake snacks.

Hostess sells Twinkies, Ding Dongs and Ho Hos, along with Dolly Madison cakes, which includes Coffee Cakes and Zingers. Hostess

also sells Devil Dogs, Funny Bones, and Yodels under the Drake's brand.

Hostess, which is based in Irving, Texas, announced in November that it was shutting down its business and selling its bread,

snacks and cakes brands along with its 33 bakeries and other operations.

The company's demise came after years of

management turmoil and turnover. Workers said the company failed to

invest in updating

its snack cakes and breads. Hostess filed for its second Chapter

11 bankruptcy in less than a decade last year, citing steep

costs associated with its unionized workforce.

The company was able to reach a new contract

agreement with its largest union, the Teamsters, but the bakers union

rejected

the terms and went on strike Nov. 9. A week later, Hostess

announced its plans to liquidate, saying the strike crippled its

ability to maintain normal production. In 2011, the company's

revenue was $2.5 billion.

Hostess declined to comment, as did Grupo Bimbo's U.S. division, Bimbo Bakeries USA. Bimbo's parent company is headquartered

in Mexico. A message left with Flowers Foods, which is based in Thomasville, Ga., was not immediately returned.

Hostess said in bankruptcy court proceedings in December that it was narrowing down the bids it had received and that it expects

to sell off its snack cakes and bread brands to different buyers.

Hostess said in December that it expects to file binding bids for many of its brands this month, followed by a four-week auction

process to allow competing bids. Closings for many brands could come as soon as mid-March, according to Joshua Scherer of

Perella Weinberg Partners, which is advising Hostess.

An attorney for Hostess said in court in

December that 1,100 employees had been retained to shut down plants and

perform other

tasks as it winds down its operations. The liquidation of the

company will ultimately mean the loss of 18,000 jobs, not including

those shed in the years leading to the company's failure.