* Allergan says offer substantially undervalues company
* Allergan expects to increase earnings/share by 20-25 pct in 2015
(Adds details, background, stock movement)
May 12 (Reuters) - U.S. drugmaker Allergan Inc rejected Valeant Pharmaceuticals International Inc's unsolicited takeover offer, saying it substantially undervalued the company.
The Canadian drugmaker said on April 22 that it and activist investor Bill Ackman had made a $47 billion bid to buy Allergan, maker of the popular anti-wrinkle treatment Botox.
Allergan has since been seeking other buyers, according to sources familiar with the matter.
Allergan said on Monday it expected to increase its earnings per share by 20-25 percent in 2015 while continuing to generate double-digit revenue growth.
The company said it also expects double-digit sales growth and annual compounded earnings per share growth of 20 percent over the next five years, driven by recent and expected drug approvals.
Botox is already approved for multiple other uses including migraine headaches.
Valeant has offered to pay $48.30 per share in cash and 0.83 Valeant shares for each Allergan share.
Allergan said the large stock component of Valeant's offer is a risk to Allergan's shareholders due to the "uncertainty surrounding Valeant's long-term growth prospects and business model."
"In particular, we question how Valeant would achieve the level of cost cuts it is proposing without harming the long term viability and growth trajectory of our business," Allergan said in a letter to Valeant Chief Executive Michael Pearson.
Valeant's chief financial officer, Howard Schiller, said last week the company, along with Ackman, planned to push for changes on the Allergan board.
Valeant shares have risen 4 percent since announcing the offer, while Allergan shares have gained nearly 14 percent.
(Reporting by Esha Dey in Bangalore; Editing by Maju Samuel)