(Adds analyst comments on exchange offer, Allergan possible interest in Shire))
By Rod Nickel
June 18 (Reuters) - Valeant Pharmaceuticals Inc said on Wednesday it began an exchange offer for Botox maker Allergan Inc, taking its hostile $50.8 billion bid directly to shareholders.
Laval, Quebec-based Valeant, which said on Tuesday it would launch the offer this week, 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 percent 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, said BMO analyst Alex Afaei, in a note.
But analyst John Boris of SunTrust Robinson Humphrey said Allergan's best defense against the hostile bid may be a good offense. In a note, Boris said he believes Allergan will make an "imminent" bid for Ireland's Shire PLC, a deal that he said 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, he said.
Allergan shares rose 1.1 percent in afternoon trading in New York to $162.26, while Valeant fell 0.6 percent to $118.20. Valeant stock has closed lower in 10 of the previous 11 sessions.
Shire stock gained 3.4 percent in London.
Valeant's offer will expire on Aug. 15, unless extended. (Reporting by Rod Nickel in Winnipeg, Manitoba; additional reporting by Ransdell Pierson in New York; Editing by Jeffrey Benkoe, Andrew Hay and Jonathan Oatis)