UPDATE: "An IPO is not on the table today," Hostess owner Dean Metropoulos told Forbes. "A number of people lobbed in interest to buy Hostess. We considered a number of offers well above $2 billion, but we decided there was too much upside. We’ve run the company for only two years. Not taking Hostess to its full potential is an inappropriate thing to do."
Metropoulos denounced Tuesday's report, saying no sale or IPO is planned right now.
- Twinkies and Ding Dongs maker Hostess Brands LLC is no longer looking to be purchased, but looking toward an IPO, sources told Reuters.
- Hostess received offers from other companies in addition to private equity firms that put the company at between a $2.4 billion and $2.5 billion valuation, but turned them down. It is going to pay its owners a dividend with borrowed money, according to the sources.
- For $410 million, private equity firm Apollo Global Management LLC and consumer industry investor C. Dean Metropoulos bought the bankrupt company in 2013.
Back in 2013, Hostess pointed to heavy debt plus burdensome wage and pension obligations as reasons behind its financial struggles, reports Reuters. With Apollo and Metropoulos, it was able to give profitability and market share a boost, harnessing different distribution channels. It holds the No. 2 position in U.S. sweet baked goods.
Considering the ups and downs the company has seen the last few years, an IPO would certainly be a sweet spot for it. Perhaps a nostalgia factor could help out the company, particularly as its Twinkies are a force in American pop culture.