US biopharmaceutical firm Cephalon has rejected an unsolicited $5.7bn takeover bid by Valeant, as the Canadian company seeks to replace Cephalon’s board of directors.

Cephalon claimed that Valeant’s $73-per-share offer undervalued the company and its key assets and prospects, whereas Valeant have argued that the offer represented a premium of 24% over the company’s closing share price before the deal was made public.

In a letter to Valeant, Cephalon said, “From the standpoint of the Cephalon shareholder, a transaction with Valeant at this time and at the price you proposed would mean foregoing the greater value obtainable from Cephalon’s strategic plan.”

Cephalon currently boasts strong cash-flow, as well as several pipeline drugs in development and cancer drug Treanda.

Valeant has said it seeks to replace the board because it believes it is not acting in the best interests of shareholders, while also claiming that Cephalon has declined to engage in negotiations.