Yucaipa joins bid to buy Twinkies maker

Supermarket billionaire Ron Burkle’s investment firm, Yucaipa Cos., said Friday that it would join Bimbo Bakeries USA and the International Brotherhood of Teamsters in an effort to buy troubled Interstate Bakeries Corp.

The Kansas City, Mo.-based maker of Hostess Twinkies and Wonder Bread, which filed for bankruptcy protection in September 2004, has lined up about $400 million in financing from specialty lender Silver Point Finance when it emerges from bankruptcy. But that deal hinges on Interstate Bakeries reaching an agreement with the Teamsters, its largest union.

The Teamsters has fought the deal, saying health and welfare concessions and changes in the company’s distribution system would cost union jobs.

A bankruptcy judge in Kansas City had given Interstate Bakeries and the Teamsters, which represents 9,500 Interstate employees, until Wednesday to work out their differences.

Yucaipa filed papers Friday, noting that Interstate Bakeries and the Teamsters had not reconciled their differences. The investment firm said its plan would not require outside financing and would give most of the parties in the bankruptcy a better payoff than Interstate Bakeries’ proposal.

It also said Bimbo Bakeries, a Fort Worth-based company that includes brands such as Entenmann’s, has the expertise to successfully fix Interstate Bakeries’ financial and market problems.

The Teamsters released a statement saying that plan would save tens of thousands of jobs. It also said Yucaipa and Bimbo Bakeries had committed to recognizing union members’ sacrifices and to positioning Interstate Bakeries for future growth.

Yucaipa’s filing asked the judge to end Interstate Bakeries’ exclusive right to file a plan of reorganization, to deny approval of the financing package with Silver Point and to give it three weeks of access to Interstate Bakeries’ information to formulate a final reorganization plan.

Interstate Bakeries said in a statement Friday that its reorganization plan was the best alternative to maximize value for parties in the bankruptcy, build competitive advantage and save employees’ jobs.

“If Yucaipa or anyone else has a better proposal to help IBC emerge from Chapter 11, secure jobs and maximize value for creditors, the company will welcome the opportunity to review the details of any such proposals,” the statement said.

Interstate Bakeries has closed 13 of its 54 bakeries and eliminated 7,000 of its 32,000 jobs since filing for bankruptcy.