Several titans of the food industry have reportedly expressed interest in acquiring Hostess Brands Inc., the company behind Twinkies and other calorie-rich snack foods, as the firm continues to find its financial footing.
Major companies like General Mills, Mondelez International, PepsiCo, and Hershey are purportedly exploring the possible takeover of Hostess Brands, reported Reuters, which cited sources familiar with the matter.
Shares of Hostess Brands (NASDAQ: TWNK) shot up after news of a possible takeover broke. As of August 31, shares were trading around $28.50, up 32% from the 52-week low of $21.59.
Hostess Brands, which has struggled to innovate and stay competitive over the last decade, began attracting buyout interest after the American-based bakery company increased prices on several of its products to boost revenue amid persistent inflation, according to Reuters.
The company has reportedly tapped Morgan Stanley to advise it on all future negotiations. Although Hostess Brands has garnered takeover interest, sources who spoke with Reuters noted that a buyout deal was not guaranteed and that Hostess Brands could opt out of a sale if the terms were unfavorable for investors or the company’s creditors.
Founded in 1930, Hostess Brands is one of several major players in the snack food industry. Despite being known for iconic snacks like Twinkies, Ho Hos, Zingers, and Ding Dongs, the Kansas-based company has struggled to develop new products that could capture the hearts and stomachs of the typical American consumer.
Declining product interest and a poor financial outlook put Hostess Brands in hot water with investors in the early 2000s and 2010s. The company filed for bankruptcy protection in 2004 and again in 2012 due to mounting debt incurred under private equity owners and a cultural attitude that shifted away from processed, high-in-sugar snack products toward healthier alternatives, per JustFood.
The Dallas Express reached out to Hostess Brands for comment about the possible takeover but did not hear back by press time.