The Icelandic generic-drug company

Actavis

said Monday it doesn't plan to raise its offer for the Croatia's

Pliva,

apparently conceding a bidding battle to

Barr Pharmaceuticals

(BRL)

.

"While we continue to believe that the combination of our two businesses would create one of the most exciting companies in our industry ... we will not compromise our growth plans by overpaying for acquisitions despite very strong synergies," said Robert Wessman, president and CEO of Actavis, in a prepared statement.

Actavis' last bid was worth about $135.52 a share based on current exchange rates. The Barr offer of $140.64 a share is worth about $2.5 billion.

However, Actavis didn't close the door completely. "Actavis will continue to follow closely the progress of the bidding for Pliva, and reserves the right to apply to re-enter the process," the company said.

Barr will seal the deal if it acquires more than 50% of Pliva's shares by Oct. 11 via a tender offer. Actavis controls about 20.8% of Pliva's shares through direct stock ownership or stock-option agreements.

Barr and Actavis

have been fighting for months over Pliva, with its diverse product offerings, manufacturing capabilities for making generic versions of biotechnology drugs and strong presence in European markets.

Whoever buys Pliva will create the third-largest generic drugmaker in the world, behind Israel's

Teva Pharmaceutical Industries

(TEVA) - Get Report

and Switzerland's

Sandoz

, a division of

Novartis

(NVS) - Get Report

.

Barr's stock was up 12 cents to $53.87.