Allergan Said Seeking Deal with Salix to Fend off Valeant

The share price of US drugmaker Salix Pharmaceuticals gained 16% on August 19 following a Wall Street Journal report that it and at least one other company have been approached by compatriot Allergan about a potential deal.

Allergan, whose most important product is the anti-aging drug Botox, is struggling to avert a $53 billion hostile grab by Canada-based Valeant Pharmaceuticals International, led by activist shareholder Bill Ackman's hedge fund, Pershing Square Capital Management,.

Allergan Chief Executive David Pyott confirmed the WSJ report.

Salix is already in the process of merging with a unit of Swiss-listed and Italian-based Cosmo Pharmaceuticals.

News agency reports said it was unclear where any of the reported talks with Salix stand, but one of WSJ's sources said Allergan could strike a takeover deal with that company or another unknown party as early as next month.

Headquartered at Raleigh, North Carolina, Salix manufactures products used to prevent or treat gastrointestinal disorders. So far, it has generated sales of $766.4 million this year.

Cosmo said in July it would merge its Irish subsidiary with Salix, another example of overseas deal-making by US companies seeking to lower their tax bill by shifting tax domiciles abroad.