Fox & Hound Restaurant Group said Friday it agreed to be acquired by Los Angeles-based private equity firm Levine Leichtman Capital Partners Inc. for $15.50 per share, rejecting an offer by rival bidders Newcastle Partners LP and Steel Partners II LP.

Under the terms of the deal, Fox Acquisition Co., an affiliate of Levine Leichtman, agreed to start a tender offer before Jan. 6 to acquire all of Fox & Hound’s outstanding shares. The offer, which is worth about $155.4 million and was unanimously approved by Fox and Hound’s board, is expected to close in the first quarter of 2006.

Fox & Hound also agreed not to seek out other transactions, but said it may respond to unsolicited proposals and may even terminate the merger agreement if it receives a superior proposal within 12 months. If that happens, the company will be required to pay a $5 million fee to Levine Leichtman.

The agreement ends a heated bidding war for Fox & Hound that began in October when the Wichita, Kan.-based casual dining restaurant operator signed a letter of intent to be acquired by Levine Leichtman for $14 a share. Fox & Hound investors sued in early October, saying they would be shortchanged by Levine Leichtman’s $140 million deal. The suit by Primavera Investors LLC asked a judge to stop the buyout and award damages.

In mid-December, Newcastle Partners and Steel Partners then countered with a bid for $14.50 a share, which Fox & Hound’s board said was a superior offer. Newcastle and Steel raised the bid to $15.50 per share on Wednesday, and Fox & Hound gave Levine Leichtman five days to match the offer. Fox & Hound said Friday that it notified Newcastle and Steel that it would not enter into a transaction with the two companies.