Valeant Pharmaceuticals is planning to make a bigger offer for Allergan after its unsolicited $46 billion offer was rejected.

Allergan, best-known for Botox, turned down Valeant and investor Bill Ackman’s Pershing Square Capital Management's offer earlier this week, saying it substantially undervalues the company "and creates significant risks and uncertainties for the stockholders". Furthermore, chief executive David Pyott said the board "believes that the Valeant business model is not sustainable", adding that it "runs counter to Allergan's customer-focused approach".

In response, Valeant chief executive Michael Pearson has written to Allergan shareholders saying that by rejecting the offer without having had any discussions, the latter has "offered a business-as-usual strategy while attempting to discredit our company". However he said "we remain resolute in consummating a merger with Allergan" and based on feedback from the latter's stockholders, Mr Pearson announced a May 28 webcast where "we plan to improve our offer".

He said this "demonstrates our commitment to getting this deal done", adding that "we are prepared to pay a full and fair price, but, consistent with our track record, we will remain financially disciplined". He concluded by saying that "we will not stop our pursuit of this combination until we hear directly from Allergan shareholders that you prefer Allergan's 'stay the course plan' to a combination with Valeant".