Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) and Bill Ackman’s Pershing Square are said to be planning to boost their offer to acquire Botox maker Allergan, Inc. (NYSE:AGN) by $15 a share, according to people familiar with the developments.

The enhanced offer marks Valeant and Pershing Square’s third increase to their original bid.

Valeant – Allergan merger could be the largest deal of the year

The latest bid from Valeant Pharmaceuticals and Pershing is intended to keep the Botox maker from striking a rival deal. The duo’s bid could value Allergan at over $56 billion, increasing the earlier offer by $4.5 billion. If the Allergan deal goes through, it would be the largest deal of the year, rivaling AbbVie Inc (NYSE:ABBV)’s pending $54 billion acquisition of Shire PLC (ADR) (NASDAQ:SHPG).

Valeant And Pershing May Sweeten Allergan Deal By $15 A Share

The deal between AbbVie Inc. and Shire may not happen if AbbVie can’t perform a tax inversion by acquiring Shire.

Earlier Allergan called a truce by reaching an agreement with Valeant Pharmaceuticals and Pershing Square over a special shareholders’ meeting on the originally scheduled date, Dec.18, thus ending one contentious scene in their tussle. Allergan’s shareholders of record on Oct. 30 will be entitled to receive notice and vote at the Dec. 18 meeting.

Citing people familiar with the matter, Liz Hoffman and David Benoit of The Wall Street Journal point out that a goal in boosting the price now is to encourage hedge funds and other so-called event-driven investors to buy more Allegan stock before the Oct. 30 deadline. Both Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) and Pershing Square want to oust a majority of Allergan, Inc. (NYSE:AGN)’s board to pave the way for the merger talks that Allergan has rebuffed.

Allergan’s options

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) and Pershing Square have been pursuing Allergan since April when they teamed up to make an unsolicited offer for the Botox maker. The original offer from Valeant and Pershing Square valued Allergan at about $47 billion at the time, or about $153 per share. However, the Botox maker rejected the offer, saying that it undervalued the company. The duo raised their bid in May. Before Allergan had a chance to respond, the bidder raised its offer once more, to about $53 billion, or $177 a share in cash and stock.

According to people familiar with the development, Allergan has held talks in recent weeks to acquire Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP), which could make the company too large for Valeant to swallow. The Botox maker also has fielded takeover interest from Actavis plc (NYSE:ACT).

Both Valeant Pharmaceuticals Intl Inc (NYSE:VRX) (TSE:VRX) and Pershing Square are still ironing out the timing and mix of cash and stock. Some people believe Allergan, Inc. (NYSE:AGN) would consider a takeover proposal that values the Botox maker at above $200 per share. Valeant and Pershing Square had reportedly been planning to enhance the offer later this month, closer to Valeant’s earnings release, but they apparently sped up the plan as the Botox maker continued to explore other possibilities.