Flowers to pick up some Hostess Brands?

Flowers Foods Sizes Up Hostess
Excerpt:

The Thomasville, Ga., company is considered a likely bidder for some of the assets owned by Hostess, which last week was granted permission by a federal bankruptcy-court judge to begin liquidating. The end came after a contentious bankruptcy that began in January and culminated this month in a strike.

... Considered an efficient operator with a solid management team, Flowers started out as a bakery owned by the Flowers brothers in 1919, producing 30,000 loaves of bread a day. Over the years it has acquired numerous other makers of bread, rolls and snack cakes. But its presence is still largely concentrated in the Southern U.S. Based on that geographical concentration, Hostess is an attractive target, with its nationwide distribution of Twinkies, Ho Hos and Ding Dongs.

With $2.8 billion in revenue last year, Flowers is projecting sales to rise 7% to 9% in fiscal 2012 and earnings per share to increase 3.5% to 5%. Flowers reported a profit of $31.2 million in the third quarter ended Oct. 6, up from $31 million a year earlier. Sales rose 6.2% to $717.3 million. The stock is up 18% so far this year.

Flowers is unlikely to rehire Hostess employees as union workers, analysts said. It has been clear with investors that it isn't interested in assuming labor contracts, said BMO Capital Markets analyst Amit Sharma and other analysts. More than 90% of Flowers's workforce is nonunion, analysts estimate.

Flowers plants have been running under capacity after a recent expansion for a private-label customer proved overly ambitious, the company has said. That extra capacity could make an acquisition of some Hostess snack cakes even more attractive, analysts say. "If Flowers were to buy some Hostess snack cakes, it would help them utilize their excess production capacity," said BMO's Mr. Sharma.

Comment: Corporate site (image is screen grab). Stock quote FLO (image below)

Grupo Bimbo to buy Hostess whole or in parts?

The Twinkie: Will it return as a Mexican expat?

Excerpt:

The brands “most likely will be purchased by a competitor that will bolt the additional sales to a more efficient delivery system,” David Pauker, a food industry restructuring specialist, tells Reuters. “The company itself won't survive.”

Food producers ConAgra and Flowers Food, the American company behind Nature Valley granola, have expressed interest and so has Little Debbie baker McKee Foods.

But another possible bidder hints at the future of Twinkies and maybe the US bakery business as a whole: Mexico’s Grupo Bimbo, the world’s largest bread baking firm, which already owns parts of Sara Lee, Entenmann’s and Thomas English Muffins.

Bimbo has already sniffed around the bankruptcy proceedings that have haunted Hostess for a decade, in a bid to further expand its North American portfolio and pad its $4 billion net worth. Bimbo reportedly put in a low-ball bid of $580 million a few years ago, Forbes reports, and may be rewarded for that move since the Hostess kit-and-kaboodle may fetch more like $135 million today.

Comment: I hope NOT ConAgra because I have CAG stock! The Grupo Bimbo ADR is GRBMF.