Intel delays C&T acquisition, again

Four times hit, but not down for the count.

Intel (INTC) today said it will delay its acquisition of Chips and Technologies (CHPS) for a fourth time, due to a continuing antitrust investigation by the Federal Trade Commission.

The companies announced that the expiration date for all outstanding common shares of graphics chip maker C&T has been extended until January 19 because of an FTC request for additional information regarding the deal.

As of Friday, Intel reportedly had tendered about 64 percent of C&T's stock, pending FTC approval.

Neither company would specify what information the FTC wants at this point. But Chuck Mulloy, spokesman for Intel, said that each of the four instances in which the deal's expiration date has been extended were a direct result of FTC concerns. Intel made its initial offer to C&T in late July of this year.

"They will let us know what their ruling is on or before January 9," said Mulloy. "They still have a number of questions about the transaction."

The FTC is scrutinizing the proposed merger and how it relates to the agency's broader investigation of anticompetitive practices by Intel. (See related stories.) Both Intel and a C&T spokesmen denied that the deal has anticompetitive overtones, and analysts tend to agree.

"I do think they will eventually get approval," said Krishna Shankar, an analyst with Donaldson Lufkin & Jenrett. "Essentially, the graphics market is pretty competitive. There is no critical concentration of power."

Shankar, for one, believes that Chips and Technologies has much to offer Intel.

"The company has some pretty good technology," Shankar said. "But they can be pretty viable as a stand alone company."

Since Intel made its initial bid in July, C&T's market value has dropped. Under the terms of the deal, Intel offered $17.50 per share of C&T's common stock, which was trading at around $10 before the deal was announced. The stock climbed to around 16 a share in the months following the announcement, but since has fallen, to close at 14-3/8 today, down 1/2 point from yesterday.

"In any transaction, you don't have control over the outcome, you just have to plan for both eventualities," said Tim Christoffersen, spokesman for C&T.

(Intel is an investor in CNET: The Computer Network)