NEW YORK (TheStreet) -- Shares of Salix Pharmaceuticals  (SLXP) are up 7.05% to $168.76 on heavy trading volume after peer company Endo International  (ENDP) made a takeover offer for the company, seeking to wrest it from Valeant Pharmaceuticals (VRX), sources told the Wall Street Journal.

Endo proposed to buy Salix for $175 a share in cash and stock. The offer, made in a letter to Salix's board, is 11% higher than Valeant's agreement to pay $158 a share for Salix last month, the Journal said. At $175 per share, the offer would value Salix at about $11 billion, according to Reuters.

Canada's Valeant Pharmaceuticals agreed to buy Salix Pharmaceuticals for $158 a share in a cash deal valued at about $10 billion, the companies said late last month.

The announcement followed Valeant's failed hostile bid for Allergan (AGN), the maker of Botox. Allergan agreed to sell itself to Actavis (ACT) for $66 billion late last year.

Trading of Salix and Endo was halted around 1:45 p.m. Eastern Time on pending news, with analysts speculating high volatility as the cause. Endo resumed trading shortly after 3:00 p.m and is now down 1.74% to $87.45. Salix shares began trading again around 3:20 p.m. Shares of Valeant Pharmaceuticals are down 4.07% to $193.27.

More than 12.24 million shares of Salix changed hands by 3:37 p.m. in New York, compared to the average of 3.6 million shares.

Separately, TheStreet Ratings team rates SALIX PHARMACEUTICALS LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SALIX PHARMACEUTICALS LTD (SLXP) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, SLXP's share price has jumped by 37.62%, exceeding the performance of the broader market during that same time frame. Although SLXP had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • SLXP, with its very weak revenue results, has greatly underperformed against the industry average of 10.4%. Since the same quarter one year prior, revenues plummeted by 94.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SALIX PHARMACEUTICALS LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SALIX PHARMACEUTICALS LTD swung to a loss, reporting -$6.52 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($3.91 versus -$6.52).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 650.4% when compared to the same quarter one year ago, falling from $52.26 million to -$287.65 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Pharmaceuticals industry and the overall market, SALIX PHARMACEUTICALS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SLXP Ratings Report