Wall Street insiders are increasingly speculating that First Data Corp.'s pending deal to acquire First Financial Management Corp. might unravel.

Securities analysts and other observers say the companies may have difficulty clearing antitrust hurdles or encounter competing acquisition bids from other companies.

The proposed $6.6 billion merger of the two transaction processing giants, announced Tuesday, was met with a healthy dose of investor skepticism. The deal valued First Financial at about $90 a share, but the Atlanta-based company's stock was trading around $83 on Friday.

"There's just too much uncertainty that this deal will get done," said a Wall Street arbitrager who asked not to be named.

Analysts' initial reaction centered on concerns that the Justice Department's antitrust division could block the deal on grounds that it would eliminate too much competition in the consumer money-transfer and credit card transaction-processing businesses.

"It appears that First Data and First Financial Management will have 40% to 45% of the merchant processing portion of the credit card industry, and nobody really challenging them in second position," said Richard X. Bove, an analyst with Raymond James & Associates in Clearwater, Fla.

But definitions of that market, and hence measures of concentration, differ. Richard K. Weingarten, an analyst with Montgomery Securities in San Francisco who has covered both firms extensively, said he believes their combined merchant processing share is closer to 35%.

"This deal will almost certainly get some antitrust scrutiny," he noted, but he is confident, like the two principals, that it will pass muster.

Both analysts agreed that other bids for First Financial could come from telecommunications or technology providers looking for a foothold in the emerging business of electronic commerce.

"It's evident that the telephone companies could have a major interest in First Financial," Mr. Bove said, noting that the company now generates two billion telephone calls a year.

"Sprint and AT&T have First Financial's business now, but MCI is First Data's primary supplier," he said. He noted that AT&T also has the synergies with its own credit card and computer businesses.

Mr. Bove said First Financial could fetch more than $100 a share if other bidders step up, which could occur even before the antitrust questions are settled.

"I believe First Data will not be the one who ultimately ends up acquiring First Financial," he asserted.

Mr. Weingarten estimated the merger will cut annual costs at the two firms by $110 million - enough to win investors over to the current price.

"While technology companies talk and maneuver, these two firms are already doing electronic commerce," Mr. Weingarten said. "Who knows ... maybe Microsoft will buy First Financial."

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