Diamond Foods Inc said the Securities and Exchange Commission has launched a probe into its accounting of payments to walnut growers, raising concerns of further delays to its deal to acquire Procter & Gamble's

Pringles business.

Shares of company, which sells Emerald nuts and Pop Secret popcorn, fell more than 11 percent to their lowest in two years Thursday on Nasdaq.

The news prompted at least one analyst to downgrade the stock citing general uncertainty and increased risk that the deal may fall through.

Procter & Gamble indicated to us this morning that it would not be comfortable moving forward with the Pringles deal while the SEC investigation was ongoing, Jefferies analyst Thilo Wrede wrote in a client note.

The investigation will most likely keep Diamond's stock depressed with an unclear end date for the SEC activity and the probability of the Pringles acquisition closing is now even less certain, Wrede, who cut the stock from buy to hold, said.

When contacted by Reuters, a P&G spokeswoman said: Our commitment to the transaction is predicated on the favorable resolution of all these current investigations.

The probe centers on allegations that Diamond delayed payments to growers to lower costs in the company's 2011 fiscal year ended July 31, in order to make its earnings look better while it was negotiating to buy Pringles.

The company, which agreed to buy the snacks foods brand in April, has seen its stock lose more than half its value since it first announced an internal probe on the matter in November.

However, the shares soared nearly 53 percent last Friday, after an analyst said the company would likely come out of its accounting examination quickly and without evidence of wrongdoing.

T he stock fell again Monday, after Diamond delayed filing its quarterly report to allow its audit committee time to complete the inquiry.

The internal probe had also forced Diamond to delay the closing of the Pringles acquisition until 2012.

Diamond shares were down about 9 percent to $26.91 on Thursday.

(Reporting by Ranjita Ganesan in Bangalore and Jessica Wohl in Chicago; Editing by Supriya Kurane, Saumyadeb Chakrabarty, Anthony Kurian)