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* New offer at $21/shr vs prior offer of $14.75
* Reaches partial settlement of lawsuit on merger
* Shares fall as much as 11 pct
April 27 (Reuters) - Landry's Restaurants Inc LNY.N said Chief Executive Tilman Fertitta agreed to raise his bid to take the company private by offering $21 per share, or about $341 million, in cash.
The new offer values the stock at a discount of 16 percent to its Monday close of $25.03.
Shares of the second-largest U.S. seafood restaurant operator were down 5 percent at $23.71 Tuesday afternoon, after having run up 55 percent since activist investor William Ackman blocked Fertitta's earlier bid of $14.75 in November.
Ackman's Pershing Square Capital Management LP currently owns about 10 percent of Landry's outstanding shares and Fertitta about 50 percent, according to Reuters data.
Landry's said in a statement Tuesday that Fertitta reached a tentative partial settlement of a Delaware lawsuit in connection with his proposal to merge Landry's into his wholly owned company.
The Houston-based company added that any final agreement will have to be approved by the stockholders.
Fertitta has been trying to take the company private for two years. (Reporting by Renju Jose in Bangalore; Editing by Don Sebastian)