Twinkies May Find Buyer, Hostess CEO Says
ABC News Linsey Davis and Taylor Behrendt report:
Hostess Brands, the maker of the iconic Twinkies snack cakes, may find a buyer when it heads to bankruptcy court today 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 as well as popular snacks including Ho Hos, Ding Dongs, Suzy Qs, Sno Balls and Wonder Bread.
Last week the company announced it would close after it imposed wage and benefit cuts to its 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 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."
Frank Hurt, president of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union told the Wall Street Journal that there's "more than a good chance" someone would swoop in to buy the company's 30 brands and preserve jobs. He said that Twinkies and Wonder Bread are popular and they will be "produced somewhere, some time and by our members."
In photos: Iconic Hostess Products
The company's sales had dropped over the years as mothers began swapping healthier choices to the fat-filled snack cakes and white bread. 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.
"It's pandemic out here. Everybody's going to grab the Hostess," one man said, describing the sentiment.
In the last few days, several people have posted new do-it-yourself Twinkie recipe videos on YouTube.