Valeant Pharmaceuticals said in a letter yesterday to Allergan's board of directors that it was prepared to raise its offer to at least $200 per share but stopped short of doing so.

Valeant, whose existing offer values the Botox maker at about $179 per share, or $53.25 billion, said last week that the Canadian pharmaceutical company was considering raising the bid and would increase the cash portion of the offer to do so.

"To be clear, Valeant is prepared to improve its offer and provide value to your shareholders of at least $200 a share. We are confident that an increase in our stock price, and in consideration, will provide that value," Valeant CEO Michael Pearson said in the letter.

At $200 per share, the offer would be worth more than $59 billion.

Allergan said the letter was a tactic to distract investors from Allergan third-quarter earnings, which it announced yesterday morning and did not include offer details. "I think all we saw today was an offer to negotiate," said Allergan chief executive David Pyott.

Valeant and hedge fund Pershing Square Capital Management launched a hostile offer for Allergan in April, but the Botox maker has staunchly refused it. The company has said that shareholders would be better off if it stays independent or finds its own acquisitions.

Allergan will hold a shareholder meeting on December 18th at the request of investors who own more than 35 per cent of the company's stock, including Pershing Square head William Ackman. Investors will vote on new directors put forth by Mr Ackman and to open discussions on the deal.

A hearing is scheduled today in a federal court in California, where a judge will hear from both sides if Mr Ackman's stake in Allergan of nearly 10 per cent should count as part of that shareholder vote. Allergan asked to exclude the shares as part of an insider trading suit it filed against Valeant and Pershing Square.