As noted the other day, Hostess is seeking lidquidation of its operations rather than trying to emerge out of bankruptcy as a going concern because it could not negotiate the union concessions it said it needed.
But there may be a White Knight on the Horizon, Sun Capital Partners:
Private equity firm Sun Capital Partners wants to buy bankrupt bakery Hostess Brands Inc., Fortune has learned.
The proposal would be to operate Hostess as a going concern, including reopening the shuttered factories and continuing union representation of Hostess workers.
Sun Capital privately expressed interest in acquiring Hostess earlier this year, but the bakery’s creditors chose for an alternate reorganization plan that ultimately failed. Following Friday’s liquidation, Sun reengaged by contacting Hostess advisor Perella Weinberg Partners. It also plans to contact the relevant labor unions.
Approximately 18,000 union jobs would be saved if Hostess remains a going concern.
Here’s the irony. The founder of Sun Capital Partners is the person who hosted the private fundraiser at which Mitt Romney made his infamous 47% statement, Host of Romney party dubbed ‘private equity party boy’
The reported host of a private $50,000-a-plate fundraiser that has come to haunt Mitt Romney this week is a prominent Florida private equity manager who has attracted media attention for partying with the rich and famous.
Marc J. Leder, the co-founder of Sun Capital Partners of Boca Raton, Fla., was named by Mother Jones journalist David Corn Monday night as the host of a Romney fundraiser May 17 that was secretly videotaped by an unidentified attendee. Romney has come under fire for remarks at the event in which he dismissed the “47 percent” of Americans who support Obama as “victims” who are “dependent on government” and “who believe they are entitled to health care, to food, to housing, you name it.”
Leder, who has given nearly $300,000 to Romney and other Republicans this cycle, used part of his fortune to become a co-owner of the Philadelphia 76ers basketball team and has become a fixture of New York tabloid reports, hobnobbing with rap mogul Russell Simmons and other celebrities. The New York Post dubbed him a “private equity party boy.”
There’s a lesson here. One which will not be learned.
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Comments
I was rejoicing that these greedy union scumbags were going to lose their jobs.
Let them rot in unemployment hell. But, no.
Someone is going to bail them out. And let them keep their union, the source of all the trouble. A Republican no less.
Call me bitter, angry, whatever. I’m tired of the liars, cheaters, and thieves always winning in the end, in the ways that really matter. Always, always, ALWAYS. It’s been my experience personally and seeing events in the world. Somehow, I’d like to see the good guys win. But we never do.
Take heart, Cal.
The EEEeEEEEeeevil venture capitalists who helped Hostess get to their present dire straits were Deemocrats.
And nobody’s chestnuts are out of the fire yet. The mediation could very well fail.
Saving these jobs is a TERRIBLE idea. The union is killing itself off. Why on earth would anyone on the right want to save it?
It’s hard to see how Hostess can be saved at this point, regardless of some venture (vulture?) capitalist throwing money at the problem. Besides the anchor of the union work rules around Hostess’ neck, there are also the U.S. sugar tariffs, the EPA rules on volatile organic compounds, and the changing tastes of the American consumer.
I’m figuring that Grupo Bimbo will eventually buy them out and move production to Mexico where there are no unions, no EPA, and no sugar tariffs.
I hadn’t heard of Groupo Bimbo until earlier today when I read about it – and like the good arrested adolescent that I am I haven’t stopped laughing yet.
Is Groupo Bimbo a firm made up of former Hooters waitresses?
*rimshot*
Think about how humiliating it would be for those rough-tough bad arse union thugs to lose their jobs when a bunch of Bimbos took their jobs to right to work states.
Somehow, I think if I ever have another Hostess Cupcake, it’ll taste all the more delicious.
Do they not have Bimbo bread at your local supermarket?
No just bimbos.
They most definitely have unions in Mexico. Actually union as it is government run.
If I had the cash, I’d buy the brand and move the operation to South Carolina.
Heh.
Yes, there is lesson there all right….and a union will NOT have a clue.
There may be more layers of irony here than in any Hostess retail baked product!
Move the whole operation to Texas, a right-to-work state and the union will be powerless.
Then America could still get their fix of ultimate junk food…
Screw the unions and that sleazeball Dick Trumka. Hostess is beholden to the stockholders, not the union, not the employees. The CEO MUST do what is in the best interest of the stockholders – and he determined that liquidation of assets was the best course of action.
These are definitely an acquired taste &. Unlikely to. Be exportable.
I bit into a Moon Pie once & got a sensation so ultra sweet it was unpleasant. Hostess products appeared to me to be mucho processedo.
If the US dollar goes higher any export potential for these rather unique foods will disappear entirely.
Methinks their time has passed.
While saving ONE union job is excessive, the actual number of the Hostess jobs held by union members is about 6,000 of the 18,000 total.
This should be an Atlas Shrugged moment. Let them wither on the vine.
At the very least, buy the brand and move production to right to work states. With the exception of the NE, every (lower 48) non-RTW state is bordered by at least one RTW state. Distribution shouldn’t be too crazy as a result.
Or, become a regional brand…
*The distance traveled in their distribution chain estimation is merely a guess on my part. I couldn’t find a map of current factories.
A fool and his money will [soon] SLOWLY be parted.