Advanced Medical Optics Inc. (NYSE: EYE) said it is considering an offer for Bausch & Lomb Inc. (NYSE: BOL), setting up what could become bidding war with the private equity firm Warburg Pincus LLC.

Advanced, which makes eye-care and surgical products, said on Thursday that Bausch & Lomb's $65 per share agreement with Warburg undervalues the company, and that it was willing to pay more than $3.67 billion for the firm.

We plan to enter the go-shop process with the intention of exploring a superior offer for the company, Advanced Medical said in a statement.

The acquisition would help the company expand its product line, and gain greater exposure in areas such as Asia and Latin America. Bausch & Lomb is recovering from a massive eye-solution recall last year.

Advanced Medical also makes eye solutions in addition to medical devices, products for cataract surgery, implants and laser vision correction. The company acquired IntraLase Corp. in April for its laser surgery assets, which may pose difficulty Bausch agrees to be acquired as well.

If the company wins the BOL asset, it would have to integrate both ILSE and BOL, simultaneously -a tall order for any company, Mathew Blackman, analyst at Lehman Brothers told clients Friday morning. Additionally he noted Advanced Medical has had a history of significantly underestimating integration charges and expenses.

The Santa-Ana Calif.-based firm said it wants to offer a full range of vision-care for all ages, however.

We believe it is only logical to explore this opportunity given the highly complementary nature of our two businesses, the firm stated.

Advanced Medical was spun out of Allergan Inc. in 2002. Since then, it has grown by acquiring Pfizer Inc.'s eye-surgery business and Vizx Inc., a laser eye-surgery company.

Bausch & Lomb recalled the lens cleaner ReNu with MoistureLoc in 2006 after the solution was linked to a potentially blinding fungal infection. The action resulted in charges of $25 million as well as $19 million in lost revenue from returns and rebates.

With Bausch ailing, Warburg Pincus bid offered a 5.7 percent premium for the company on May 15. Warburg also said it would assume about $830 million in debt as part of the takeover.

If Bausch & Lomb accepts a superior bid, it must pay a $40 million break-up fee to Warburg Pincus.

Shares of Bausch jumped $3.76, or 5.7 percent to close at $70.21 in Thursday trading on the New York Stock Exchange. By mid-day Friday, shares rose an additional 62 cents, or 0.88 percent to reach $70.83.