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Morgan Lewis, Paul Weiss, O'Melveny Advise on Buy that Pairs Twinkies with Pabst Blue Ribbon, Am Law Daily

March 12, 2013

Bankrupt baked goods manufacturer Hostess Brands Inc. said Tuesday that it has selected a winning bid, pending court approval, in the auction organized to sell off a snack cake business that includes iconic cream-filled treat Twinkies.

The bid in question is the $410 million joint offer made by private equity firms Apollo Global Management and Metropolous & Co. that Hostess chose in January as the auction's "stalking horse" bid. As The Am Law Daily has previously reported, Metropolous is no stranger to iconic American brands, having purchased "award-winning" Pabst Blue Ribbon beer three years ago.

CNN reports that Irving, Texas-based Hostess informed the U.S. Bankruptcy Court for the Southern District of New York on Monday that no other qualified bids had been submitted for the snack cake portfolio, which also includes such Hostess offerings as Ho Hos and Ding Dongs, as well as five bakeries. Hostess said in a statement that it will seek court approval of the sale at a hearing set for March 19.

The sale of the snack case unit comes as bankrupt Hostess attempts to liquidate all of its holdings after seeking Chapter 11 protection in January 2012. The company announced last month that it plans to sell the majority of its breads unit to Flowers Foods Inc. for $360 million, while Grupo Bimbo has agreed to pay $31.9 million for Hostess's Beefsteak bread business.

Hostess is scheduled to conduct an auction later this week for the Drake's snack cake business, along with a collection of bread brands. Little Debbie snack cakes manufacturer McKee Foods Corporation was named the lead bidder for that business in January after making a $56.6 million offer, according to our prior reporting.

Jones Day has been representing Hostess throughout the bankruptcy process-and in connection with its various asset auctions-with a team led by New York-based M&A partners John Kane and Robert Profusek. We reported in January that restructuring partners Lisa Laukitis and Heather Lennox were also working on the snack cake unit auction, along with labor and employment partner Jessica Kastin, real estate partner William Herzberger, and environmental law partner Mary Beth Deemer.

Morgan, Lewis & Bockius has been advising Apollo in connection with the offer to purchase the snack cake business with a team led by business and finance partner Robert Robison and associate Andrew Milano, according to our prior reporting. The firm's team also includes restructuring head James Garrity Jr., labor and employment partner Stanley Lechner, intellectual property partner Ron Dreben, environmental transactions practice leader Judith Walkoff, benefits and compensations partner Gary Rothstein, antitrust partner Harry Robbins, tax partner Kenneth Kail, real estate of counsel Kathleen Martin, and business and finance associate Patrick Fleming.

According to a Morgan Lewis spokesman, Paul, Weiss, Rifkind, Wharton & Garrison corporate partners Gregory Ezring and Brad Finkelstein are serving as Apollo's finance counsel, while corporate partners Robert Hirsh and Carl Reisner are advising Metropoulos. Contacted by The Am Law Daily in January to confirm the firm's role, a Paul Weiss spokeswoman declined to comment.

An O'Melveny team led by partner Eric Rothenberg and counsel John Renneisen has been handling environmental diligence and documentation for Apollo in connection with the bid.

Reprinted with permission from the March 12, 2013 edition of The Am Law Daily© 2013 ALM media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 or or visit