Hostess' bid procedures OK'd for sale of Hostess, Dolly Madison lines

By Jim Witters

Wilmington, Del., Feb. 11 - Hostess Brands Inc. received approval of its bid procedures for the sale of the Hostess and Dolly Madison brands - including the Twinkies product - according to a Feb. 11 filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Hostess selected Apollo Global Management, LLC and Metropoulos & Co. as the stalking horse bidder for the snack cake businesses.

New HB Acquisition, LLC, an affilaite of Apollo and Metropoulos, has agreed to pay $410 million for the brands, five bakeries and equipment.

Bid procedures

Under the process approved by the court:

• The bidding deadline is 5 p.m. ET on March 11;

• An auction, if needed, will be conducted at 10 a.m. ET on March 13; and

• A sale hearing is scheduled for 10 a.m. ET on March 19.

As the stalking horse bidder, New HB is entitled to a breakup fee if it is not the successful bidder at the auction. The breakup fee will be the greater of 3% of the cash price of the successful bid or "the alternative sale breakup fee percentage."

The alternative sale breakup fee percentage is defined in court documents as the highest breakup fee percentage approved by the bankruptcy court in connection with the sale by one or more of the debtors of assets totaling at least $30 million.

The alternative sale breakup fee percentage includes all breakup fees, expense reimbursement, topping fees and similar fees.

Hostess Brands, an Irving, Texas-based operator of regional bakeries, filed for bankruptcy on Jan. 11, 2012. Its Chapter 11 case number is 12-22052.

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