Luby's beats Tavistock bid for Fuddruckers

Luby's Inc. has beat out a $40 million bid from the Travistock Group to buy the bankrupt owner of Fuddruckers Inc. and Koo Koo Roo brand restaurants.

The Houston-based cafeteria chain owner will pay $61 million to buy Magic Brands LLC, according to a press release Friday.

The Austin-based company had previously announced intentions to sell the brand to Tavistock, which operates Freebird's World Burrito stores, but the company was beat out in auction June 17. The deal is subject to court approval, likely during a hearing June 22.

Under the new deal, Luby's will assume certain Fuddruckers' obligations, real estate leases and contracts, as well as pay an additional $2.45 million in cash if it does not assume certain contracts. Luby's is paying for the company in reserved cash and by expanding its credit facility.

Fuddruckers currently operates 60 company-owned Fuddruckers, three Koo Koo Roo locations and 138 franchised Fuddruckers. As part of the bankruptcy proceedings, Magic agreed to terminate certain Fuddruckers leases and close 24 corporate-owned restaurants by April 30, including two in Austin.

The acquisition is expected to close on or before July 9.

Luby's operates 96 restaurants in Austin, Dallas, Houston, San Antonio, the Rio Grande Valley and other locations nationwide.