The tug-of-war over the acquisition of Longs Drug Stores Corp. by CVS Caremark Corp. or Walgreen Co. has grown more intense as Longs shareholders wade into the battle.

The U.S. Federal Trade Commission is investigating whether the Walgreens bid will substantially lessen competition among retail pharmacies in Hawaii, California and Nevada.

In particular, the FTC requested information on Longs' operations in Hawaii.

Yesterday, CVS issued a statement saying it took exception with a memo issued Monday detailing an independent antitrust analysis sent by the CtW Investment Group to Longs' board.

CtW, a union pension advisory group that owns about 1.4 percent of Longs, informed Longs' board that its law firm conducted an independent analysis and concluded there were no significant antitrust concerns from a Walgreens/Longs merger.

Last month, Deerfield, Ill.-based Walgreen made an unsolicited offer to acquire Walnut Creek, Calif.-based Longs for $2.8 billion, which was a $3.50 per-share premium over CVS's offer of $2.7 billion. CVS's offer has already been approved by antitrust regulators.

CVS, of Woonsocket, R.I., said CtW's memo is full of inaccuracies.

While the memo claimed that almost two-thirds of all Longs stores overlapped with CVS stores, CVS said there are 14 metropolitan statistical areas where Longs has about 200 stores and CVS has none.

The memo from CtW claims that CVS had plans to enter the Hawaii market, but CVS says it never had plans to enter Hawaii.

CVS has a specialty pharmacy in Kailua, with plans to open another at Restaurant Row, but has no CVS/pharmacy retail stores in Hawaii.

While the memo says CtW was unable to assess the potential competition from Walgreens without access to its internal company documents, CVS said it already knew that Walgreens is in the process of negotiating its eighth location in Hawaii, with plans to open 25 to 30 in the next several years.

Walgreens has one store on Keeaumoku Street, with plans to open additional stores in Kaneohe, Kailua, Kalihi, Aiea, Nuuanu, Lahaina—and now Nanakuli.

“;CVS Caremark continues to believe that its offer is a compelling, certain proposition for Longs shareholders,”; said the company's statement. “;Our offer has cleared all regulatory hurdles, is fully financed and ready to close.”;

Two investment firms—Barclays Capital and Lehman Brothers —said they favored the CVS acquisition because it has already received FTC approval and could close immediately. Walgreens' $75-a-share offer could decline between 10 to 15 percent if regulatory approval takes six months or more, said Lehman, plus the deal could be blocked entirely.

Both firms are acting as financial advisers to CVS and have also provided bridge loan commitments in connection with the transaction.