Canadian drugmaker Valeant Pharmaceuticals raised the cash component of its unsolicited offer for Botox-maker Allergan, valuing the U.S. firm at $49.44 billion and ratcheting up pressure on the target company.
Valeant's sweetened offer also included a contingent value right that could be worth an additional $7.6 billion.
Valeant on Wednesday offered to pay $58.30 per Allergan share in cash, about $10 higher than its previous offer of $48.30. The stock component of the offer remains the same at 0.83 of a Valeant share for each Allergan share.
Valeant Chief Executive Michael Pearson admitted at a meeting Wednesday that "being engaged with Allergan is a bit of a pastime," but stressed that his company is "committed to not overpaying."
Still, Pearson said he fully expects that in the end, the company will merge with Allergan.
The new offer values Allergan at $166.16 per share as of Tuesday's closing price, and is about 8.6 percent higher than the previous bid of $153 as on April 22 when Valeant first made its offer.
That offer, by Valeant and activist investor Bill Ackman, was worth $47 billion and was spurned by Allergan, which said the Canadian company had overstated possible savings from the deal.
Valeant's pursuit of Allergan comes during one of the busiest periods for M&A in the pharmaceutical sector.
Valeant's offer on Wednesday is lower than $180-$200 per share that investors were looking for, according to an investor survey last week.
But the new offer also includes a contingent value right of up to $25 per share related to the sales of Darpin, Allergan's experimental eye drug that is seen as a potential competitor to Regeneron Pharmaceuticals's successful medicine Eylea. The potential value of the Darpin contingent value right was not immediately available.
"Allergan shareholders want this deal to occur, but they want a higher price and the optionality on Darpin," Pearson said to about 300 shareholders of the two companies. "We think the offer we made this morning addresses both of those concerns."
As for Valeant's interest in the proposed deal, Pearson said his company does not care about "getting bigger," only creating value for its shareholders.
Allergan said it will review and consider the revised proposal.
"I was actually surprised (Valeant) didn't go higher, and maybe they will go higher," said David Amsellem, analyst at Piper Jaffray. "Clearly they are going to continue to be aggressive, making a full-court press to get this done. Will they need a higher bid? We'll see."
Allergan on Tuesday built its case for rejecting Valeant's offer, one day before Valeant's meeting to explain its case.
Read More M&A fever – the coming epidemic
Separately, Valeant said Wednesday it would sell some of its skincare treatments business, including facial fillers for treating wrinkles, to Nestle SA for $1.4 billion in cash.
That sale suggests Nestle is not a potential white knight acquirer for Allergan, and removes a possible anti-trust risk to a Valeant-Allergan merger, JPMorgan analyst Chris Schott said.
—By Reuters with CNBC