Business of Food & Beverage

Hostess Brands Considering Takeover Offers, According to Reuters

Aug. 26, 2023

The stock price shot up in Friday afternoon trading; the news service claims suitors include General Mills, Mondelez International, PepsiCo and Hershey.

Dave Fusaro

Amid a tiny slide in its share price, Hostess Brands Inc. apparently has become the target of takeover talk, and the maker of Twinkies snack cakes apparently is not necessarily opposed.

In an exclusive story that broke Friday afternoon (Aug. 25), Reuters news service quoted “people familiar with the matter” as saying Hostess is being courted by suitors that include General Mills, Mondelez International, PepsiCo and Hershey, among others.

In the final hour of trading Friday, Hostess’ stock shot up 26% to nearly $28 a share, nearing its all-time high, giving the company a market value of close to $4 billion, according to Reuters. Hostess also had debt net of cash of about $900 million as of the end of June.

Reuters speculated that Hostess became an acquisition target after it raised prices on some of its products to boost revenue. That raised investor concerns over its prospects and caused the stock price to slip 1% year-to-date, versus a 29% rise in the Nasdaq Composite Index. At the $27.89 share price, Reuters figured the company’s market value at nearly $4 billion. Hostess also had debt net of cash of about $900 million as of the end of June.

Reuters said Hostess had retained Morgan Stanley as advisors and was considering some of the offers.

Under various names, Hostess was founded in 1930 and in its time launched some legendary snack brands, including Twinkies, Ho-Hos, Ding Dongs, Zingers and Voortman cookies. Under the name Interstate Bakeries Corp., the company operated under bankruptcy court protection from 2004 to 2008 but filed bankruptcy again in 2012.

A year later it was sold piecemeal to several companies, with a group led by serial bankruptcy savior Dean Metropoulos buying most of the sweet snacks and the Hostess name. In 2016, the company was solvent enough for Metropoulos to engineer its initial public offering.

Hostess sales first broke the $1 billion mark in 2020. In our just-published Top 100 list, Hostess was No. 85, with 2022 sales of $1.358 billion and $164 million in net income.

About the Author

Dave Fusaro | Editor in Chief

Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.