Twinkies May be Saved by Mexican Billionaire........

[h=1]Next Twinkie Maker: Will A Mexican Billionaire Family Buy Hostess' Orphaned Brands?[/h]
Hostess sweets have tempted the sugar-starved among us for more than eight decades. Now, the company is going out of business. That moves the focus on Hostess’ brands—Twinkies, Devil Dogs, Wonder Bread, Ho Ho’s, to name a few—from the store shelf to the auction block.
It seems quite plausible that the next Twinkie maker could be a Mexican company run by a billionaire family.



Meet Daniel Servitje Montull. He and his family are worth more than $4 billion by our tally. Servitje runs Grupo Bimbo, a publicly traded bakery concern that ranks as the world’s largest bread maker. (Seated close to Servitje is his uncle, Don Roberto, and his father, Lorenzo. Papa Servitje founded Bimbo with three others in 1954.) Daniel Servitje assumed control of Bimbo in 1997, setting the company on a course of rapid growth. This included a battle with Mexico‘s tortilla don; positioning white bread in Latin American markets; and careful management of Bimbo’s fleet of white delivery vans.
A period of substantial expansion—profits doubled and revenue more than tripled—that also included several flirtations with buying Hostess.
Acquisitions are at the very center of Bimbo. Indeed, Bimbo has gobbled up companies, and this was initially confined to South America. Servitje, a thin man with deeply set eyes, worked to extend Bimbo’s reach from Mexico to the tip of South America, in Patagonia. Thereafter, his attention turned north. He bought Mrs. Baird’s Bakeries of Fort Worth, Texas for $200 million shortly before 2000, then Heiner’s and Earth Grains. And just last year, Bimbo bought the U.S. bakery business of Sara Lee Co. for $709 million, as well as the Spanish and Portugal portions in a separate transaction.
Today, Bimbo is a $10 billion sales business with $200 million in cash on its balance sheet. By contrast, Bimbo posted $3 billion in sales a decade ago; annual profits have more than doubled to roughly $400 million. It competes with U.S. companies like Kellogg, Hershey and General Mills, and with privately held operations such as McKee Foods, the maker of Little Debbie’s snacks. (Other Hostess suitors include Flowers Food, the company behind Nature’s Own, according to SunTrust.) Supermarkets stock Bimbo staples like Entenmann’s and Thomas’ English muffins. And, significantly, the Sara Lee acquisition suggests that Bimbo’s appetite for U.S. bakeries is hardly satiated.
So, perhaps Twinkies will take their place in Bimbo’s white vans. (A FORBES email to a Grupo Bimbo spokesman was not immediately returned.) Bimbo tried once before to seize Hostess. It teamed up with a Hostess union and an U.S. investment firm, billionaire Ron Burkle’s Yucaipa, to form a competing bid during Hostess’ first trip through bankruptcy in 2007. That eventually fell apart. Bimbo backed out, and Yucaipa went ahead and entered a fruitless offer, valuing Hostess at $580 million. Hostess’ business has gone staler since, the product of unfunded legacy pensions, leverage and labor strikes.
But even before 2007, Bimbo seemed sweet on Hostess. In the early 2000s, analysts widely speculated that Bimbo thought Hostess a key ingredient for North American expansion with delivery routes that penetrated across the country into convenience stores, gas stations and grocery markets. Bimbo publicly stated that it was shopping in 2000, and analysts widely speculated that Interstate Bakeries—the Hostess parent then facing three straight years of losses—would fall to Bimbo.
Today, with a taste still for American companies, Bimbo may just bite.
Reach Abram Brown at abrown@forbes.com.

Seems appropriate...... We get the weed from Mexico, may as well get the Twinkies from there also. Free case of Twinks with a q.p.

hope they buy up the orange cupcake recipe while they are at it. Bimbo has a pretty big presence in CR, maybe they will even find their way down here one day.

I don't know enough about this to speak with certainty, but I believe a new owner of the company would be liable for some or, if not all, of the companys past debt as well. Hostess is in debt to the workers pension fund to the tune close to 3/4 of a Billion dollars I've recently learned. Which makes the likelihood of the whole company being sold highly unlikely. They will more than likely sell off the profitable brands the company owns the rights to. Bimbo is in THE best position to capitalize on the situation because they already market a similar product and it would enhance their portfolio. More so than Flowers cake, Pepsico or the Beer mogul thats been frequently mentioned.

We had another company in the area close and sell off its assets like this, and I learned today these employees were not eligible for unemployment benefits under these circumstances. Meaning these 18,000+ employees may not be as well. Tough road ahead for these guys.

Twinkie talks fail as Hostess and baker’s union are unable to reach agreement
The maker of Twinkies and Ding Dongs said late Tuesday that it failed to reach an agreement with its second biggest union. As a result, Hostess plans to continue with a hearing on Wednesday in which a bankruptcy court judge will decide if the company can shutter its operations.
THE ASSOCIATED PRESS
Published: Tuesday, November 20, 2012, 8:19 PM
Updated: Tuesday, November 20, 2012, 8:20 PM

Hostess Brands Inc. lived to die another day.

The maker of Twinkies and Ding Dongs said late Tuesday that it failed to reach an agreement with its second biggest union. As a result, Hostess plans to continue with a hearing on Wednesday in which a bankruptcy court judge will decide if the company can shutter its operations.

The renewed talks between Hostess and The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union came after the company declared last week that it would move to wind down its business and start selling off its assets in bankruptcy court. The company cited a crippling strike that was started on Nov. 9 by the union, which represents 30 percent of Hostess workers.

After making its case to liquidate on Monday, the bankruptcy judge hearing the case noted that the two sides hadn’t yet tried resolving their differences through private mediation. The judge noted that 18,000 jobs were on the line and urged the company and union to try to resolve their differences. Both sides agreed to hold mediation proceedings on Tuesday.

In a statement late Tuesday, Hostess said it would not comment on the breakdown in talks other than to say that mediation “was unsuccessful.”

Hostess shut down its three dozen plants late last week after it said the strike by the bakers union hurt its ability to maintain normal production. The bakers union says the company’s demise was the result of years of mismanagement, however, and that workers have already given steep concessions over the years.

Hostess, weighed down by management turmoil, rising labor costs and the changing tastes of Americans, is making its second trip through Chapter 11 bankruptcy restructuring. The company, based in Irving, Texas, had brought on CEO Gregory Rayburn as a restructuring expert in part to renegotiate its contract with labor unions.

The company reached an agreement with its biggest union, the International Brotherhood of Teamsters, on a contract that dramatically reduced pension contributions, as well as slashing wages and health benefits. But the company said the bakers union stopped returning its calls about a month ago. The Teamsters urged the smaller union to hold a secret ballot on whether members wanted to continue striking. Many workers in the bakers union decided to cross picket lines this week, Hostess said it wasn’t enough to keep operations at normal levels.

Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow. The bakers union meanwhile pointed to the steep raises executives were given last year as the company was spiraling down toward bankruptcy.

The company’s announcement last week that it would move to liquidate prompted a rush on Hostess treats across the country, with many businesses selling out of Twinkies within hours.

Even if Hostess goes out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess’ sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies along brought in $68 million so far this year.


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