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Intel extends offer for Chips

Intel extends the expiration date for its offer to acquire Chips and Technologies to November 21.

Intel (INTC) today extended the expiration date for its offer to acquire Chips and Technologies to November 21.

Intel announced in July it was making a bid to purchase the outstanding shares of the graphics chip maker for $17.50 per share. As a result of the tender offer, however, the Federal Trade Commission has launched an investigation into Intel's business practices. Specifically, the FTC is seeking information on whether Intel has violated antitrust statutes by attempting to monopolize markets through allegedly anticompetitive behavior.

The Chips acquisition is at the center of the FTC's investigation. Under antitrust law, an acquisition can be stopped if the merger would unduly quash competition in a specific market. Intel's size, financial resources, and relationships, say some industry sources, could easily have a deadening effect on the graphics market because of the financial wherewithal a company like Chips suddenly would wield if the deal went through. In the past, Intel's entry into a market, such as the chipset market, has meant a quick decline for other players.

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

Despite the widespread nature of the FTC's investigation, few analysts, so far, believe that the investigation will result in any violations. Intel, most say, has taken extraordinary precautions to avoid any potential breaches of antitrust law.

The offer to buy the shares was originally set to terminate on October 6.