An offer by Icelandic company Actavis to acquire Pliva of Croatia has reportedly come under threat as Barr Laboratories has thrown its hat into the ring.

Actavis has offered 630 kuna a share for Pliva, which makes generic drugs and pharmaceutical chemicals, valuing the company at around $1.85 billion. But a report in the Financial Times claims that US drugmaker Barr has upped the ante with a $2.1 billion offer of its own.

To date Pliva has responded coldly to Actavis’ overtures, maintaining that the Icelandic firm’s bid is too low and ‘does not fully reflect the value of Pliva’. If it went ahead, an Actavis/Pliva merger would create a company ranked third in the global generics market.

Pliva has just completed a restructuring of its business after losing a valuable revenue stream from sales of Pfizer’s antibiotic Zithromax (azithromycin), which has seen it exit from proprietary medicines completely and position itself as a generics pure-play. The company has said it is in talks with ‘several’ companies about a possible takeover.

Shares in Pliva were trading just under 620 kuna, up nearly 6%, in the wake of the rumour.