Hostess Picks McKee as Buyer for Drake's Cakes

NEW YORK (AP) -- Hostess is moving forward with the sale of its Drake's cakes to the maker of Little Debbie cakes.

The bankrupt company says it picked McKee Foods as the buyer for the cakes, which include Devil Dogs, Funny Bones and Yodels, after nobody stepped forward to top its offer.

A source who requested anonymity because the sale process is private had said the pair of investment firms picked to buy Twinkies had expressed interest in Drake's as well, but that the offer ultimately did not qualify. The auction scheduled for Friday will be canceled as a result, according to a filing in bankruptcy court.

Separately, Metropoulos & Co., which is joining Apollo Global Management (NYSE: APO  ) to buy Twinkies, said it hopes to have the cakes back on shelves by this summer.

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