Hostess Sale of Bread Brands Nears Completion

NEW YORK (AP) -- Wonder bread is one step closer to getting a new owner.

A person familiar with the situation says a bid by Flowers Foods (NYSE: FLO  ) to buy several bread brands from Hostess was met with no competing offers. The individual requested anonymity because the auction process is private.

The $360 million bid by Flowers also includes Nature's Pride, Butternut, Home Pride and Merita breads. An auction will still be held Thursday for a separate $30 million bid by Flowers for Beefsteak. The source said a competing offer for that brand was submitted by Mexico's Grupo Bimbo, which makes Thomas' English muffins and Entenmann's cakes.

Any sales would be subject to approval by a bankruptcy court on March 19.

Flowers Foods, based in Thomasville, Ga., makes Tastykakes and breads including Nature's Own and Cobblestone Mill. Hostess has also picked a "stalking horse bidder" for its snack cakes, which include Twinkies, Ding Dongs and Ho Hos. The deadline to submit competing offers for those brands isn't until mid-March.

Taken together, Hostess has said its six bread brands generated just under $1 billion in sales last year, with Wonder bread accounting for about half of that. Flower Foods, which generates about $3 billion in annual sales, said it expects the deals to be accretive to its earning this year. The company plans to finance the deal through a mix of cash and debt.

Hostess announced it would go out of business late last year.

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