Valeant Pharmaceuticals said last night that it had begun an exchange offer for Botox maker Allergan, taking its hostile $50.8 billion bid directly to shareholders.

Quebec-based Valeant said Allergan shareholders can choose to trade each share for $72 in cash and 0.83 Valeant share, or all cash or all stock. 

California-based Allergan said its board would review the exchange offer from Valeant. It previously rejected on June 10 Valeant's bid, which contained the same major terms. 

Valeant is backed by Bill Ackman's Pershing Square Capital Management, which is Allergan's biggest shareholder with a 9.7% stake. 

Taking a step toward resolving the battle is positive for Valeant, given the toll it has taken on the company's shares and its potential missed opportunities while focused on Allergan, analysts said. 

But other analysts said Allergan's best defence against the hostile bid may be a good offense. They believe Allergan will make an "imminent" bid for Shire, a deal that would be more attractive than Valeant's proposal. 

Such an acquisition would give Allergan shareholders sales diversification, sustainable organic growth and other benefits and spare them the risk of holding Valeant shares. 

Valeant's latest offer will expire on August 15, unless extended.