After initiating liquidation of Hostess Brands on Friday, the company's CEO said its iconic Twinkies and other popular brands are likely to find buyers
Note: This story has been updated 6:56 p.m. ETLiquidation of Hostess has been averted for now. Thank you to Digital Journalist Tim O'Brien for the update shared in this story's comments.
According to the Wall Street Journal, Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union will engage in mediation on Tuesday. If mediation fails, then Hostess will return to court on Wednesday.
While Hostess has closed its doors and ceased operations after 82 years, there is a good possibility many of its famous brands created over the decades will live on under the management of other companies.
According to ABC News, Hostess CEO Gregory Rayburn said on Sunday, "I think we'll find buyers. A few have surfaced already since Friday expressing interest in the brand to acquire them."
Reportedly, Con Agra and Flowers Foods have expressed an interest in buying Hostess brands. Another potential buyer is Mexico-based El Grupo Bimbo, reported the Christian Science Monitor (via ABC News). El Grupo Bimbo is the largest bread-baking company across the globe.
Bloomberg reported today that Rayburn said Bimbo is not going to be a buyer of Twinkies or any other Hostess brands.
“One misconception in the market is that Bimbo would be a buyer and bakery leadership told us in several plants that Bimbo would come in and buy, which is absurd,” Rayburn said on Monday morning in an interview with Bloomberg Television. Citing the company's purchase of Sara Lee, he said, “Due to antitrust, it would never happen."
On Friday, after a standoff with the Bakery, Confectionery, Tobacco Workers and Grain Millers Union (BCTGM), Hostess followed through on its warning it would shut its doors if enough workers did not come back to work citing "we do not have the financial resources to weather an extended nationwide strike."
The company had previously reached an agreement with the International Brotherhood of Teamster union and Rayburn noted their efforts in trying to do their part in preserving the company.
Hostess Brand snack cakes
Hostess filed for Chapter 11 bankruptcy protection in January 2012. Today the company heads back into court to finalize the liquidation process. As Hostess closes its doors, over 18,000 jobs will be lost.
"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.
ABC News reported Frank Hurt, president of the BCTWG Union told the Wall Street Journal there's "more than a good chance" another company would buy the company's 30 brands and "preserve jobs," hiring back Hostess workers to continue baking these goods.
In Bloomberg's report, Rayburn, who was brought in earlier this year to try and salvage the company, said Hostess brands are "more attractive" to buyers without the unions.
CBS News noted the mismanagement of Hostess made by previous leaders of the company, including an inability to evolve with changing times and a lack of long-term vision to ensure the stability of the company.
Whether or not the Twinkies brand returns to the market remains to be seen, but all indicators seem to say it will return under new management. Despite this, a "black market" for the products has emerged right after the company announced its closure.
Over the weekend, stores shelves across the country were wiped clear of Hostess products as those loyal to the brand, or looking to generate some extra cash, bought up all the products. Ambitious entrepreneurs listed Twinkies and related products on eBay at astronomical listings.