The Carlyle Group, a Washington merchant banking firm, yesterday offered $214 million in its second bid to acquire Chi-Chi's Inc., a national chain of Mexican-style restaurants.

The Carlyle Group, created to find investment opportunities for its partners, offered $9 a share for Chi-Chi's yesterday. In late September, several weeks before the Oct. 19 stock market collapse, Carlyle said, it offered the equivalent of about $10 a share but did not receive any encouragement from Chi-Chi's.

Stephen L. Norris, managing director at Carlyle, said that the offer had been revised in light of the stock market's downturn, which took the stock down temporarily from $8.62 to $6.50. The stock closed yesterday at $8.25, up 75 cents.

Norris claimed that the $9 offer represented about a 20 percent premium over where Chi-Chi's shares might be trading except for large stock purchases recently made by both Carlyle and Chi-Chi's.

He said that Carlyle bought about 400,000 shares at "very attractive prices" during the stock market slide and that Chi-Chi's bought an undetermined number of shares.

Carlyle owns about 1.7 million shares of Chi-Chi's acquired for $14 million, Norris said. He added, "We see this as a good, long-term investment."

Norris said the major difference between the two Carlyle offers is that the new one is all cash, while the earlier offer consisted of $7 in cash, $2.50 in preferred stock and an estimated 50 cents in a stock payment.

Hal Smith, president of Chi-Chi's, which is headquartered in Louisville, Ky., did not return a phone call seeking comment.

The effort to acquire Chi-Chi's, if successful, would represent the first major investment deal for Carlyle since the firm was formed by five Washington executives earlier this year.

Norris, a former Marriott Corp. vice president, said he and his colleagues were looking at Chi-Chi's as "the first leg" of a major restaurant operation. He said that Carlyle plans to keep Smith as the head of Chi-Chi's.

Smith, he noted, is relatively new is his job and Chi-Chi's "is a turnaround situation."

Norris said the acquisition would be financed by cash provided by "deep pocket" investors and by bank loans, rather than by junk bonds, the nickname for low-rated corporate bonds. While these often have been used to finance takeover deals, investors are reported to be leery of junk bond financing in the current market environment.

Chi-Chi's has experienced three years of declining earnings, according to Value Line, a research service. The restaurant company's annual sales total about $280 million.

Chi-Chi's operates and franchises 180 restaurants in the United States and Canada. It closed 21 ailing units this year but its profits may be slow to recover, according to Value Line.