September 24, 2014 / 3:13 PM / in 4 years

UPDATE 1-Salix contacts Actavis over potential sale-source

(Adds background on Salix, Actavis and Allergan, share prices.)

NEW YORK, Sept 24 (Reuters) - Salix Pharmaceuticals Ltd has been in contact with Actavis Plc about a potential sale to the larger drugmaker, even as Salix continues discussions with Allergan Inc about selling itself, according to a person familiar with the matter.

Allergan revived discussions to buy Salix in recent weeks after on-and-off talks for nearly a year, as it tries to fend off a hostile offer from Valeant Pharmaceuticals Inc, Reuters reported earlier this week.

CNBC reported earlier Wednesday that Salix was in early-stage discussions with Actavis.

Representatives for Salix and Actavis could not be immediately reached for comment.

Salix shares were up $1.31, or 0.7 percent, at $170.48 on Nasdaq, while Actavis surged $4.05, or 1.7 percent, to $244.81 in late morning trading on the New York Stock Exchange.

CNBC business reporter David Faber cited sources as telling him that a combination of Actavis and Salix would have more synergies than a deal between Allergan and Salix.

Actavis makes generic versions of drugs and sells its own branded drugs for gastroenterology and women’s health while Salix produces drugs that treat gastroinstestinal disorders.

Allergan is best known for its botox anti-wrinkle treatments and its top businesses include eye care, neurosciences, medical dermatology, medical aesthetics and urologics.

Pershing Square Capital Management, which owns nearly 10 percent of Allergan shares, has gathered shareholders for a special meeting in December where it hopes to unseat directors and begin to push the deal forward. (Reporting by Olivia Oran in New York; Additional reporting by Caroline Humer; Editing by Bernadette Baum)

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