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Hostess Brands, the maker of Twinkies, is weighing a potential sale amid interest from major companies in the food industry, according to a new report.
General Mills, Mondelez International, PepsiCo and Hershey are among the companies that have expressed an interest in potentially acquiring Hostess Brands, Reuters reported Friday, citing sources familiar with the matter. The outlet added that Hostess has hired Morgan Stanley for advice in handling negotiations, although sources noted that an agreement on a deal may not be reached and Hostess could opt against a sale.
Hostess began to attract potential acquisition interest after it raised prices on some of its products this year in an effort to boost revenue. Its shares, which had been down 1% year-to-date prior to the report, shot up by as much as 26% on the news Friday before settling around 21.7% at Friday’s close. Hostess Brands’ stock rose another 2.2% in after-hours trading as of Sunday afternoon.
FOX Business’ requests for comment from Hostess and the companies named in the Reuters report as its potential suitors weren’t immediately returned on Sunday.
Hostess, which is based in Lenexa, Kansas, was founded in 1930 and has launched several iconic household brands – including Twinkies, Ding Dongs, Ho Hos, Zingers and Voortman cookies and wafers.
The company previously filed for bankruptcy on two occasions in 2004 and 2012 as it struggled to come up with new snack foods to appeal to consumers and coped with a debt load it incurred under private equity owners.
Hostess returned to the stock market in 2016 after a turnaround led by entrepreneur Dean Metropoulos and private equity firm Apollo Global Management in a deal with a special purpose acquisition company backed by the private equity firm founded by Alec Gores.
By the end of 2020, Hostess overhauled its portfolio and was generating more than $1 billion in annual revenue, marking an important milestone in its turnaround. The company has kept revenue growing since then, sometimes by raising prices as sales volume softened.
Hostess reported net revenue of $352 million in the second quarter of 2023, a year-over-year increase of 3.5% while its gross profit increased by 11.8% to $126 million.
Reuters contributed to this report.
“Shark Tank” investor Kevin O’Leary revealed the cold hard truth on America’s housing market, Tuesday, warning that September will be the start of “real chaos” for the U.S. economy.
“This was inevitable. We talked about it six weeks ago, and now you’re just starting to see the chips start to fall. The layering is as follows: The regional [banks] don’t know yet what their capital requirements are going to be. So, their loan books have closed like a turtle in a shell,” he explained during an appearance on “Kudlow.”
“This gets worse before it gets better. And what’s it doing to small business? Killing them right now,” he warned Tuesday.
The Federal Reserve’s aggressive interest-rate hike campaign sent mortgage rates soaring above 7% for the first time in nearly two decades, cooling the post-COVID, red-hot housing market.
Rates have been slow to retreat, hitting a fresh two-decade high last week. Freddie Mac reported that rates on the popular 30-year fixed mortgage are hovering around 7.09%, well above the 5.13% rate recorded one year ago and the pre-pandemic average of 3.9%.
Additionally, the Federal Reserve approved yet another rate hike in July, setting the key benchmark federal funds rate to the highest level since 2001.
O’Leary argues that the U.S.’s troubled banking market is going to cause “real chaos in a very short term,” spotlighting the devastating impact some of Congress’ short-sighted economic policies has had on the average American.
“What I anticipate is going to happen here, while we still have full employment which is remarkable, and you don’t put any capital into the small business sector, which is 60% of the jobs in America, you’re going to start to see some real chaos come September, October, November. This is an issue for Congress, Larry. It’s very simple,” he continued.
“They gave all their money to S&P 500 in two acts, the Chips and Science Act and the other, Inflation Reduction Act. Not a dime for small business. A trillion for the big boys, nothing for the small guys. And the small guys, they run America, so it has to be rebalanced somewhere, Larry.”
O’Leary shifted his economic contingencies to China’s “dovish” economic policy, predicting that the nation’s latest strategy shift could be “bad” for Big Tech stocks.
“Lots of people, including the Europeans, have started to look elsewhere. And China’s starting to realize if we’ve got to stay north of 4%, we need to be a little nicer to everybody around the world. That’s my guess. They’re not going to be as hawkish. And I think you’ll see the tone die down on invading anywhere else in Asia,” O’Leary explained to FOX Business’ Larry Kudlow.
“It’s bad for tech. If we keep squeezing out tech companies from selling to them, you’re going to see some correction in PE’s. I agree with you, Larry, but this is now the time to force them to the table and squeeze their heads and show them the stick and get a level playing field. I’d love to see that.”
Fox Business’ Kristen Altus contributed to this report.
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Billionaire Elon Musk on Saturday hinted at developing an X (formerly Twitter) competitor to the career networking and Microsoft-owned jobs portal platform, LinkedIn.
Musk hinted at the possibility when responding to an X user who posted: “Is there anything worse than LinkedIn?”
Musk said he sometimes receives LinkedIn links for job applications but prefers a resume or bio to be emailed because “the cringe level is so high that I just can’t bring myself to use it.”
“We will make sure that the X competitor to LinkedIn is cool,” Musk said.
Musk, who has at times been known to make grandiose promises without following through, did not elaborate on his plans. Most recently he raised the possibility of a cage match with his rival, Meta CEO Mark Zuckerberg. But as of late August, that has failed to materialize.
The Tesla CEO took control of Twitter in a $44 billion acquisition last fall after a chaotic and protracted legal battle that stretched on for months.
FOX Business has reached out to Musk and LinkedIn for comment.