Allergan Inc., the maker of the Botox wrinkle treatment, rejected an increased bid of about $54 billion from Valeant Pharmaceuticals International Inc. and investor Bill Ackman, calling it undervalued.

Allergan turned down the offer of $72 a share in cash and 0.83 a share of Valeant stock, the Irvine, California-based company said today in a statement. On May 28, Laval, Quebec- based Valeant raised its bid for the first time to $49.4 billion from $45.7 billion.

“Valeant’s revised proposal substantially undervalues Allergan,” Allergan chief executive David Pyott said in the statement. “We do not believe Valeant’s proposal reflects Allergan’s growth prospects, nor does it offer sufficient or certain value to warrant discussions between Allergan and Valeant.”

The Allergan deal would be Valeant’s largest, as part of Valeant chief executive Michael Pearson’s goal of joining the ranks of the world’s five biggest drugmakers by the end of 2016. The deal would eclipse last year’s $8.7 billion purchase of Bausch & Lomb Inc.

Pershing Square Capital Management LP, Bill Ackman’s hedge fund, is using its 9.7 percent ownership of Allergan to push the sale. It has filed to start the process for a special shareholder meeting to remove most of Allergan’s board to get the deal done.

Ackman’s Effort

If Allergan’s management and board of directors choose not to discuss the deal, “a new board, appointed by shareholders, will negotiate a transaction,” Ackman said in a June 2 conference call with investors. Pershing Square agreed to forgo the cash portion of the bid to boost the incentive for other shareholders.

Allergan is determined to stay a standalone company and management may cut costs from the business when so far they haven’t done so, Marc Goodman, an analyst with UBS Securities LLC in New York, said in a note to clients.

“We believe that management has no desire to negotiate with Valeant,” Goodman said. “The more Allergan cuts costs on its own, the less value Valeant can add by cutting costs.”

Allergan shares declined less than 1 percent to $163.36 at 12:30 a.m. New York time.

Allergan is forcing a hostile takeover attempt by not engaging in talks, Valeant said today, responding to the latest rejection.

“Allergan’s board continues to throw out inaccurate and misleading statements about Valeant and is recycling the same unsupported arguments about Valeant that have already been addressed, leaving us no choice but to take our offer directly to shareholders,” Laurie Little, a Valeant spokeswoman, said in the statement. “We look forward to giving Allergan shareholders the opportunity to speak for themselves.”

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