Gut Check was prepared to exceed our longstanding investment ceiling of $100 -- which we usually limit to the racetrack and, truth be told, seldom reach (or risk successfully) -- to snare the rights to make Twinkies, now that Hostess Brands Inc. is going belly-up and all.
Turns out we're still a teensy bit short.
Last week the bankrupt baker announced that it had set the last of its so-called stalking horse bids to liquidate the company and its assets, as an outfit called Apollo Global Management, LLC, pledged $410 million for the Hostess and Dolly Madison brands, as well as "certain equipment."
In total, Hostess Brands Inc. has now secured promises totaling $850 million for the aforementioned snack cake names, plus the Wonder, Butternut, Home Pride, Merita, Nature's Pride, Beefsteak, Sweetheart, Eddy's, Standish Farms and Grandma Emilie's bread brands and its Drake's snack-cake division (Ring Dings, Yodels, Devil Dogs, et cetera).
So, what now?
For some perspective and insight, Gut Check reached out to Tim Ramey, an analyst for D.A. Davidson & Co.
He hasn't gotten back to us yet, but in an interview with Bloomberg last fall, Ramey predicted that Hostess was toast. We're wondering if he has revised his outlook in an upward direction, or whatever it is those Wall Street types like to say.
At any rate, Apollo Global Management -- or, more specifically, private-equity billionaire C. Dean Metropoulos -- doesn't mess around. Over the years Metropoulos has purchased and revitalized the floundering Vlasic Pickle and Birds Eye brands, not to mention food-in-a-can titans Chef Boyardee and Bumble Bee Tuna brands. Gut Check also recognizes another name in Metropoulos' portfolio: Pabst, which it purchased for $250 million in 2010.
Lawn-mowing beer, food you never really want to think of as coming in a can, pickles -- and now Twinkies, CupCakes and Ding Dongs?
You know what Gut Check calls that?
We call that breakfast.