Investing
Exclusive-Twinkies maker Hostess Brands explores sale amid takeover interest -sources
© Reuters. FILE PHOTO-Hostess Brands “Twinkies” are displayed in a store in the Manhattan borough of New York City, U.S. July 5, 2016. REUTERS/Brendan McDermidFile Photo
By Anirban Sen and Abigail Summerville
NEW YORK (Reuters) -Hostess Brands Inc, the maker of Twinkies snack cakes, is exploring a sale after fielding takeover interest from major snack food makers, people familiar with the matter said on Friday.
Hostess became an acquisition target after it raised prices on some of its products to boost revenue, fueling investor concerns over its prospects. Prior to the news of the company exploring a sale, its shares were down 1% year-to-date, versus a 29% rise in the Index.
General Mills Inc (NYSE:), Mondelez International Inc (NASDAQ:), PepsiCo (NASDAQ:) Inc and Hershey Co (NYSE:) are among the companies that have shown an interest in acquiring Hostess, the sources said.
Hostess has hired investment bank Morgan Stanley for advice on handling the deal negotiations, the sources said. No agreement is certain and Hostess may decide against any deal, the sources added.
The sources asked not to be identified because the matter is confidential. Hostess and Hershey declined to comment, while General Mills, Mondelez, PepsiCo and Morgan Stanley did not immediately respond to requests for comment.
Hostess shares rose 26% on the news to $27.89 in Friday afternoon trading in New York, giving the company a market value of close to $4 billion. Hostess also had debt net of cash of about $900 million as of the end of June.
Based in Lenexa, Kansas, Hostess was founded in 1930 and is behind several iconic household brands, including Ho-Hos, Ding Dongs, Zingers, and Voortman cookies and wafers.
The company filed for bankruptcy twice, in 2004 and 2012, due to a combination of private equity owners saddling it with debt and failing to come up with new snacks that appealed to consumers.
Entrepreneur Dean Metropoulos and private equity firm Apollo Global Management (NYSE:) Inc returned Hostess to the stock market in 2016 through a deal with a special purpose acquisition company backed by the private equity firm founded by Alec Gores.
By the end of 2020, Hostess had revamped its portfolio and was generating revenue of over $1 billion, an important landmark in its turnaround efforts. It has managed to keep its revenue growing, sometimes by raising prices as sales volumes weakened.
Hostess reported net revenue of $352.4 million in the second quarter, up 3.5% year-on-year. Gross profit increased 11.8% to $126.0 million.
Read the full article here
-
Side Hustles4 days ago
Why the Best CEOs Think Like Anthropologists
-
Make Money5 days ago
Earn More in 2025: Top 10 High-Yield Savings Accounts Revealed
-
Side Hustles5 days ago
10 Roles That Are Surprisingly Well-Suited for Outsourcing
-
Side Hustles5 days ago
What to Do If TikTok is Banned — How to Protect Your Brand
-
Passive Income5 days ago
How Pets Can Promote Better Health and Well-Being in the Workplace
-
Side Hustles6 days ago
Meta Is Laying Off 5% of Its Workforce: Read the Memo
-
Make Money6 days ago
Build Your Future: 5 Simple Steps to Financial Stability
-
Investing2 days ago
TikTok faces US ban deadline as users brace for fallout By Reuters