Hostess Brands has reportedly appointed advisers to mull takeover interest from a clutch of major packaged food companies.
According to Reuters, the US-based maker of the Twinkies brand has hired Morgan Stanley to weigh up interest from companies including PepsiCo and Mondelez International.
At 15:08 GMT today (25 August), shares in Hostess Brands, which also owns Voortman Bakery, stood at $28.17, up more than 27% on the day, their highest level in nine months.
Reuters, citing unnamed sources, said Hostess Brands is exploring whether to sell after attracting interest. The news agency also named Hershey and General Mills as among the companies that have expressed interest in the business.
Just Food has approached PepsiCo, Mondelez, Hershey, General Mills – and Hostess Brands – for comment.
At the time of writing, only Hershey had responded. “It’s our policy not to comment on M&A speculation,” a spokesperson said.
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Earlier this month, the sweet snacks maker booked a 3.8% in half-year net revenue to $697.8m. During the six months to 30 June, Hostess Brands’ operating income was up 13.3% at $123.8m. Net income was 8.8% higher at $70.8m.
In 2022, Hostess Brands generated net revenue of $1.36bn, up 18.9% on a year earlier. The company’s operating income grew 9.7% year on year to $220.3m. Net income was up 37.6% at $164.2m.
Mondelez, the owner of Cadbury chocolate and Oreo biscuits, has used M&A to expand its snacks portfolio into closely related areas.
In June 2022, Mondelez snapped up US energy bar business Clif Bar & Company for $2.9bn.
Just over a year earlier, the US-based group struck a deal to buy Greece-based snacks maker Chipita, the owner of sweet baked goods brand 7 Days.
Hershey’s recent acquisitions have included additions to its sweet snacks portfolio, including the deal to buy Irish protein-bar firm Fulfil Nutrition in April last year.
However, the Reese’s maker has also sought to build out its snacks business but moving into savoury products, such as the purchase of two US suppliers of pretzels – Dot’s Homestyle Pretzels and Pretzels Inc. – in 2021 for $1.2bn.