(MENAFN- AFP) Botox-maker Allergan has approached Salix Pharmaceuticals about a potential takeover that could scuttle Valeant Pharmaceuticals' hostile bid for Allergan, the Wall Street Journal reported Tuesday.
Allergan contacted Salix and at least one other pharmaceutical company about a potential deal, the Journal said, citing unnamed sources.
A large Allergan acquisition of another company would add to the price of Valeant's proposed $53.5 billion takeover of the Botox-maker, which Allergan has vigorously fought.
Valeant first bid for Allergan in April, offering $45.6 billion before raising its bid two times.
Allergan has rejected all three bids, while criticizing Valeant's business model and saying a deal would harm Allergan's business. Valeant last week extended its latest offer until the end of 2014.
Valeant's campaign has been supported by activist hedge-fund investor William Ackman, who owns a big stake in Allergan.
A Salix takeover "makes sense" for Allergan because of Salix's "dominance in the gastroenterology space," said a note by Sterne Agee.
However, Salix's profile could also make it a strong candidate for takeover by another pharma company, Sterne Agee added.
Salix notched revenues of $934 million in 2013 and had a market capitalization of about $9 billion prior to Tuesday's reports of the potential Allergan bid.
Salix in July announced that it would merge with a unit of Italian company Cosmo Pharmaceuticals to become an Irish-domiciled subsidiary of Cosmo. It is not clear how an Allergan-Salix deal would affect the Cosmo transaction, the Journal said.
Allergan previously approached Johnson & Johnson and Sanofi about potential deals, but was rebuffed by the larger companies, according to previous US media reports.
Shares of Salix jumped 15.5 percent to $160.80, while Allergan rose 4.0 percent to $161.82. Valeant shares advanced 3.6 percent to $113.72.
Allergan and Salix declined comment.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.