UPDATE 1-Luby's buys Fuddruckers for $61 million

Fri Jun 18, 2010 2:59pm EDT

* Luby's will fund deal from cash and credit facility

* Assets include Fuddruckers, Koo Koo Roo restaurants

* Pending approval, deal to close on or before July 9

* Shares in Luby's up 6.5 percent

LOS ANGELES, June 18 (Reuters) - Luby's Inc (LUB.N) said on Friday it would buy most of the assets of Fuddruckers and Koo Koo Roo restaurant parent Magic Brands LLC for $61 million in cash, sending shares in the cafeteria operator up 6.5 percent.

Luby's said it also would assume obligations such as real estate leases and contracts and would pay an additional $2.45 million in cash if it does not assume certain contracts.

The deal, which is subject to bankruptcy court approval, is slated to close on or before July 9. Luby's plans to fund the purchase from cash and an expansion of its credit facility.

Assets include 60 company-operated Fuddruckers hamburger restaurants and three Koo-Koo-Roo chicken restaurants. Franchisees operate another 138 Fuddruckers eateries.

Magic Brands filed for bankruptcy protection on April 21. Luby's said it bought substantially all of the company's assets in an auction on June 17.

Shares in Luby's rose 25 cents to $4.08 after the deal was announced. (Reporting by Lisa Baertlein, editing by Leslie Gevirtz)

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