Who will buy Hostess brands?

Hostess Brands Inc., the bankrupt baker of Twinkies and Wonder bread, may attract bids for its brands from rival Flowers Foods Inc. and private equity firm C. Dean Metropoulos & Co. in a liquidation the company estimates will take about a year.

The 82-year-old maker of Hostess CupCakes, Ding Dongs and Ho Hos said Friday it would fire more than 18,000 employees and go out of business after a weeklong strike by its bakers’ union. Metropoulos, owner of Pabst Brewing Co., said it may bid for Hostess’s “iconic brands.” Flowers, maker of Nature’s Own bread and Tastykake snacks, could pursue some of its rival’s assets to expand its geographic reach and fill existing territory, wrote William Chappell, an analyst with SunTrust Robinson Humphrey.

Flowers is “one of the most eligible acquirers” of Hostess assets and brands, Amit Sharma, an analyst at BMO Capital Markets Corp. in New York, said in a separate note, citing Flowers’ management, acquisitions and “relatively small” overlap with Hostess’s major markets and products. Flowers shares jumped 10 percent Friday in New York trading.

“This is an unfortunate situation and we are very sad for all those impacted,” Keith Hancock, a spokesman for Thomasville, Georgia-based Flowers, said in an e-mailed statement. “We are staying focused on making sure our consumers and customers have the baked foods they need — and on serving the market.”

Flowers probably won’t bid for all of the assets, the analysts said. Daren Metropoulos, a principal of the Greenwich, Connecticut-based private equity firm, said of Hostess in an e-mail Friday that “shedding the complications of the unions and old plants makes it even more attractive.”

Tom Becker, a spokesman for Hostess, declined to comment on potential asset bids. While Hostess has seen interest in pieces of the business, its labor contracts and pension obligations have deterred offers for the whole company, Chief Executive Officer Gregory F. Rayburn said. Hostess’s brands include Dolly Madison, Drake’s, Merita and Butternut.

“Hopefully, someone will buy the brands, and some of the brands can live on, but that’s a pretty small consolation for people who are out of work,” Rayburn said in an interview on Bloomberg Television. “Somebody might buy the brand but that doesn’t mean they’re going to buy” plants and equipment used to make the products.

David Margulies, a spokesman for Bimbo Bakeries USA, didn’t respond to an e-mail seeking comment on that company’s potential interest in Hostess assets. Bimbo, based in Horsham, Pennsylvania, is the U.S. division of Mexico’s Grupo Bimbo SAB, the maker of Entenmann’s cakes and Thomas’ English muffins.

Even before the strike, Hostess endured years of declining sales as Americans turned to rivals’ snacks and breads, while ingredient costs and labor expenses climbed.

Tim Ramey, an analyst for D.A. Davidson & Co., said he expects Twinkies and other Hostess brands to disappear from the marketplace. Any buyer would need a distribution system to get the products into stores, he said.

“Without your own distribution, it’s pretty problematic,” Ramey said yesterday in an interview. “Twinkies has been on a slow death spiral for a long time. Somebody might decide they want something to do with it, but it’s not likely.”

Metropoulos, which paid $250 million for Pabst in 2010, said it looked forward to participating in the bidding.

C. Dean Metropoulos, founder of the firm, has specialized in purchasing struggling brands, such as Chef Boyardee and Bumble Bee Tuna and turning them around. The firm said it paid close attention to the maker of Twinkies and Wonder Bread during its bankruptcy proceedings.

“We have analyzed this opportunity very carefully for a few years now,” Daren Metropoulos said.

Hostess, based in Irving, Texas, on Nov. 19 will ask a bankruptcy judge to approve the company’s request to close its 36 bakeries and 565 distribution centers and sell the assets. About 3,200 of Hostess’s 18,500 workers will be retained to clean plants and mothball equipment. The plants are in 22 states, stretching from Alaska to New Jersey.

Hostess estimates that shutting the plants will cost $17.6 million in the next three months. Another $6.8 million will be spent to close depots and the same amount to idle retail stores, plus $8.1 million to shut corporate offices, according to a court filing. Hostess also is seeking permission to pay as much as $1.75 million in incentive bonuses to retain 19 officers during the liquidation.

“We will try to get what we can from the assets,” Rayburn said. “It’s an over-capacity industry, though, so that’s going to be a difficult prospect.”

The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike Nov. 9 after a U.S. bankruptcy judge in White Plains, New York, imposed contract concessions opposed by 92 percent of the union’s members. The union represents about 5,000 Hostess workers.

“The crisis facing Hostess Brands is the result of nearly a decade of financial and operational mismanagement that resulted in two bankruptcies, mountains of debt, declining sales and lost market share,” the union said Nov. 15 in a statement. Hostess “attempted to resolve the mess by attacking the company’s most valuable asset — its workers.”

The liquidation is a “deep disappointment for all of our Hostess members,” said bakers’ international union President Frank Hurt Friday. He said that if members hadn’t accepted concessions earlier, “this company would have gone out of business long ago. Our members decided they were not going to take any more abuse.”

Sally Greenberg, executive director of the Washington-based National Consumers League, accused the company’s executives in a statement of “scapegoating” the union, “rather than take responsibility themselves.”

Officials of the International Brotherhood of Teamsters, representing about 6,700 Hostess employees, were “incredibly disappointed” and “angry” about the shutdown, Rayburn said. The Teamsters union had urged the bakers’ union to let members decide by secret ballot whether to continue the walkout.

“The company has clearly been mismanaged for some time,” the Teamsters said in a statement. “Unfortunately, the company’s operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive.”

Drivers represented by the Teamsters earlier ratified a new contract with 8 percent in wage concessions and 17 percent in benefit reductions. Teamsters members “understood what was at stake and voted to protect all jobs at Hostess,” the union said in the statement.

Rayburn, who previously helped to guide companies including Syntax-Brillian Corp., Indianapolis Downs LLC and Sunterra Corp. through bankruptcy, had said Hostess lacked the financial strength and manpower to stay open during a strike.

Hostess implemented reductions in salaries and benefits on Oct. 21. By Nov. 7, some bakery union locals had started sending strike notices. The union struck 12 plants and set up picket lines at 12 more.

Hostess closed three plants permanently Nov. 12, blaming the strike, and warned that the company would liquidate unless enough employees returned to work to resume normal operations. Bakers’ union members “crippled the company’s ability to produce and deliver products at multiple facilities,” the company said in a statement.

Hostess sought court protection in January, it’s second time in bankruptcy, listing assets of $982 million and debt of $1.43 billion. Rayburn was hired as chief restructuring officer in February and named CEO in March.

The baker ended its earlier trip through U.S. bankruptcy court in February 2009 when buyout firm Ripplewood Holdings LLC and lenders took control of Interstate Bakeries Corp., which was renamed Hostess Brands.

Yesterday, as news of the liquidation reached the employees of a Hostess plant in Wayne, New Jersey, Subhas Patel, 58, called a security guard to make sure he could pick up his belongings. Patel said he had worked on the production line for 13 years.

A co-worker, Rodica Salazar, 62, worked at the company for 15 years. She blames the management for Hostess’s collapse.

“They don’t think about our lives, how you’re going to live, how you’re going to pay,” Salazar said. “I feel sorry for people, but not for them.”