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Intel, Chips settle shareholder suit

Intel and Chips and Technologies announced today they have settled a class action brought against them by shareholders over the companies' agreement to merge.

    Intel and Chips and Technologies announced today they have settled a class-action suit brought against them by shareholders over the companies' agreement to merge.

    Terms of the agreement still must be approved by the Delaware court hearing the matter. If approved, Chips and Technologies, a San Jose-based graphics chip manufacturer, would be required to make an additional disclosure in a Securities and Exchange Commission filing, which then must be mailed to shareholders.

    The settlement also calls for Intel and Chips and Technologies to extend to November 30 the date by which either company may terminate the transaction if the tender has not been completed, according to the announcement.

    Chips and Technologies shareholders sued the company in late July, challenging Intel's plans to acquire Chips for $17.50 a share. Two weeks ago the suit was amended to include Intel.

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

    Even if the judge assigned to the case approves the settlement, the deal faces a separate hurdle from the Federal Trade Commission. In late August, the agency sent letters to both companies requesting documents concerning the merger. The FTC's inquiry is part of a larger investigation of Intel's business practices. (See related story.)