Hostess Brands Inc's bid to sell its bread brands to Flowers Foods Inc has hit a roadblock with unsecured creditors objecting to the break-up fees Flowers is entitled to for being appointed as the initial or "stalking horse" bidder. The break-up fees is too high and contains an unusual "most favored nation" provision that gives Flowers a windfall without conferring an equal benefit to Hostess, a committee representing unsecured creditors said in its objections filed on Tuesday.Flowers on Jan. 11 agreed to purchase Wonder and other well-known bread brands from Hostess for $360 million as well as its Beefsteak brand for another $30 million.The Flowers purchase is subject to higher offers at a court-supervised auction and the company is entitled to a break-up fee of $12.6 million for the bread brands and $1.05 million for the Beefsteak brand.The committee said the fee is too high and will hamper bidding and wants the bankruptcy court to reduce the break-up fee to $10 million for the bread brands and $810,000 for the Beeksteak brand.
Flowers Foods, Inc. (Flowers Foods) is a producer and marketer of bakery products in the United States. Shares of FLO traded higher by 0.95% or $0.26/share to $27.49. In the past year, the shares have traded as low as $18.46 and as high as $27.25. On average, 951437 shares of FLO exchange hands on a given day and today's volume is recorded at 130755.
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