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Landry's to Sell 120 Restaurants

The company will sell most of its Joe's Crab Shack locations for about $192 million.

Landry's Restaurants

(LNY)

agreed to sell 120 of its Joe's Crab Shack locations to JCS Holdings for about $192 million, including the assumption of certain working-capital liabilities.

JCS Holdings is a new entity created by J. H. Whitney Capital Partners, a private equity group. The company said the remaining 23 Joe's Crab Shack restaurants will be converted to another Landry's type, operated under a license agreement with JCS Holdings or closed and sold. The deal is expected to close in the fourth quarter.

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Landry's said impairment and other charges associated with the Joe's Crab Shack sale will result in a charge of about $35 million to $37 million in the third quarter. Costs related to the restaurants being targeted for conversion into another brand, totaling about $6 million, will be included in income from continuing operations.

The company said its third-quarter guidance no longer applies because of the sale, and it forecast a loss for the period of $1.65 to $1.85 a share. Landry's said it is comfortable with analysts' fourth-quarter estimates for a profit of 16 cents a share.

Landry's was trading down $3.17, or 9.9%, to $28.78.