NEW YORK (TheStreet) -- Shares of Salix Pharmaceuticals (SLXP) are up 10.79% to $154.19 after it was reported that Allergan (AGN) approached the company and at least one other firm about a potential acquisition, as it seeks to fight off a $53 billion hostile takeover from Valeant Pharmaceuticals (VRX) , sources told the Wall Street Journal.
It isn't clear where any talks with Salix stand, but one source said Allergan could strike a takeover deal with the company or another unknown party as early as next month.
Salix, which has a market value of $8.8 billion, is in the process of merging with a unit of an Italian company, Cosmo Pharmaceuticals. The approximate $2.6 billion deal would move the North Carolina company's domicile abroad -- one of a slew of recent so-called inversion deals aimed at least in part at lowering taxes, according to the Journal.
If Allergan were to proceed with a takeover of Salix, it's not clear whether Allergan would also buy Cosmo, or whether such a deal would itself be an inversion, the Journal said.
Shares of Allergan are up 3.17% to $160.54.
TheStreet Ratings team rates SALIX PHARMACEUTICALS LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SALIX PHARMACEUTICALS LTD (SLXP) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."