Salix Pharmaceuticals, Ltd. Set To Be Acquired By Allergan, Inc.

Allergan, Inc. AGN is set to acquire Salix Pharmaceuticals, Ltd. SLXP in a deal probably worth more than $10 billion, according to Dow Jones Newswires.

In the extended session Monday Salix jumped nearly 16 percent to $185 a share. Allergan gained 1.4 percent to $168.50 a share.

Salix market capitalization is about $10.46 billion.

The supposed transaction is designed to derail Valeant Pharmaceuticals Inc.'s VRX $53 billion hostile bid for Allergan by making it too large and complex a target for Valeant, according to Dow Jones' unnamed sources.

At the same time, Allergan rejected a recent offer to be acquired by Actavis PLC -- in part because Allergan was focused on negotiations with Salix, Dow Jones said.

Allergan's all-cash deal with Salix, which reportedly could be announced late this week, would also probably derail Salix's current plans to buy a unit of Italy's Cosmo Pharmaceuticals SpA in a tax inversion transaction that would send Salix's headquarters to Ireland.