any investor would be a fool to buy Hostess - the unions make this an impossible buy.
Makes more sense to buy the patents, the distriburting rights and teh euipment.
Pack it all up and ship it to a right to work state. Start again there.
Makes more sense to buy the patents, the distriburting rights and teh euipment.
Pack it all up and ship it to a right to work state. Start again there.
Someone may buy the name, recipes, and trademarks, but I seriously doubt anyone is buying the company as currently structured.
Bet that Thanksgiving dinner will be a sad occasion for 18,000 families.
The beauty of liquidations is that union contracts are torn up, and there's no obligation to hire a single union worker or even buy the existing plants. Bimbo could make everything in Mexico.
If they buy the assets and not the corporation they won’t be stuck with the unions.
Not saying you’re wrong but what legal lever can unions use to do that? If there is a law that says you may not close a business then we are already have a fascist dictatorship.
I suppose there are pensions. I wonder if they are fully funded?
Once it goes into bankruptcy and liquidation the union contract is null and void as it will be a new entity that will be Hostess thus a very good buy. To buy the present Hostess and the union contract that goes with it, would be an act of financial insanity.
You really don’t have to buy much. If your already a bakery like Bimbo all you need is the recipe. That could be e-mailed after payment.
They are liquidating. You buy the goodwill, the intellectual property (ie, recipes), brand equity, and brand names. Maybe you buy the machinery, but you disassemble it and ship it to a new factory in a right to work state or in Mexico.
They are not selling it as an on-going enterprise.
Then if i understand it correctly, they could form a new company in a right-to-work state and have no unions, right?
That’s the fun part of liquidation, nobody will buy the company which includes the union contracts, they’ll buy the recipes and logos.
Grupo Bimbo makes their stuff for the Mexican market. Most likely they’ll buy the rights to the brand in NA and then manufacture the stuff in Mexico to sell north of the border. Bye, bye union jobs...
My broker years ago tried to include Hostess in my portfolio. Either that or Sandisk. I chose Sandisk.
The investor is not bound by old union contracts. He can set up shop in a right to work state, or even offshore it, and resume pumping out twinkies without the expense and headache of dealing with unions.
Bankruptcy is a fresh start for a food that never goes stale.