By Rodrigo Campos

NEW YORK (Reuters) - Stock index futures dipped in light volume on Monday as investors search for catalysts after major U.S. equity indexes closed a fourth consecutive week of gains Friday.

Deals including Yahoo's $1.1 billion bid for Tumblr indicate that companies continue to search for growth through acquisitions despite record highs, a bullish sign for stocks.

The S&P 500 and Dow industrials finished Friday at fresh record highs and the Nasdaq Composite is at its highest since late 2000. A light economic and earnings calendar could leave the market vulnerable for a pullback, but those have been shallow and short-lived as investors take any weakness as a new chance to increase long positions.

"I'm not looking for a major down movement, but cautious sideways is probably what we are headed for," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Cardillo pointed to Federal Reserve chairman Ben Bernanke's testimony before Congress on Wednesday as the highlight of the week. The beginning of the end of the Fed's massive bond-buying program, which has given strong support to stock gains, might come sooner than many investors think if recent gains in the U.S. labor market hold.

S&P 500 futures dipped 1 point and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 7 points, and Nasdaq 100 futures shed 4.75 points.

Yahoo shares dipped 0.8 percent in premarket trading after its board has approved a deal to buy blogging and social networking site Tumblr for $1.1 billion in cash.

Actavis confirmed it will acquire Warner Chilcott Plc in a stock-for-stock transaction valued at $5 billion. Actavis shares rose 2.8 percent in premarket trading and Warner Chilcott added 3.2 percent.

Pactera Technology International said it received a proposal from a Blackstone affiliate, its non-executive chairman and its chief executive to take the company private. Pactera shares rose 29 percent in light premarket trading.

Websense Inc shares jumped 30 percent premarket after it agreed to be acquired by Vista Equity Partners.

Solar products maker JA Solar Holdings reported another quarterly loss on lower prices for panels that convert sunlight into electricity, but its operating loss nearly halved from the first quarter of 2012. Its shares jumped 12.8 percent higher in light premarket trading.

China's housing inflation accelerated to its fastest pace in two years in April, a hurdle for policymakers trying to cool the property sector while supporting economic expansion.

(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Nick Zieminski)

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(Reuters) - Generic drugmaker Actavis Inc, which has been the subject of takeover speculation, plans to buy specialty pharmaceutical company Warner Chilcott Plc for $5 billion in stock.

The companies said the deal had an enterprise value, including debt, of $8.5 billion.

The move comes as Actavis has spurned approaches from Canadian pharmaceutical company Valeant Pharmaceuticals International Inc and Mylan Inc. Analysts have said that if Actavis were to buy Warner Chilcott, it would kill the chances of its being taken over.

Warner Chilcott shareholders will receive 0.16 share of the combined company. The companies said that would equate to $20.08 per share, based on Actavis' closing share price of $125.50 on Friday.

The purchase price is a 34 percent premium to Warner Chilcott's closing share price of $15.01 on May 9, the day before the companies disclosed that they were in talks. Warner Chilcott shares have since risen and closed on Friday at $19.19, narrowing the premium to less than 5 percent.

Shares of Warner Chilcott were up 2.8 percent at $19.75 in trading before the market opened, while Actavis rose 2.5 percent to $128.70.

Warner Chilcott brings a portfolio of branded women's health pharmaceuticals such as the contraceptive patch to Actavis, which makes and sells generic version of drugs that are no longer protected by patents. Because Warner Chilcott is based in Ireland, the deal creates a money-saving lower tax rate for Actavis, analysts have said. The combined company would have $11 billion in annual sales.

(Reporting by Caroline Humer in New York and Esha Dey in Bangalore; Editing by Sriraj Kalluvila and Lisa Von Ahn)

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NEW YORK (AP) — Actavis is buying Warner Chilcott in an all-stock transaction valued at about $8.5 billion which would create the third-biggest specialty pharmaceutical company in the U.S.

The announcement on Monday comes after the two companies said earlier this month that they were in talks about a possible combination. It also follows reports that Parsippany, N.J.-based Actavis rebuffed takeover bids from companies including Mylan Inc. and Canadian drugmaker Valeant Pharmaceuticals International Inc. and that Swiss drugmaker Novartis AG was considering a bid.

Actavis was formed last fall through a $5.6 billion combination of Watson Pharmaceuticals of New Jersey and Actavis of Switzerland. Actavis sells versions of the deep vein thrombosis treatment Lovenox, asthma medication Xopenex, attention deficit hyperactivity disorder drugs Adderall XR and Concerta, and the cholesterol fighter Lipitor, among many other products. It also has a pharmaceutical distribution business called Anda.

With the Warner Chilcott purchase, the new company is expected to be called Actavis PLC and will be incorporated in Ireland, where Warner Chilcott is currently incorporated. It is anticipated to have about $11 billion in combined annual revenue.

Actavis President and CEO Paul Bisaro said in a statement that the acquisition will provide support for the launch of new products over the next several years, specifically in the women's health category. He said these include Minastrin 24 Fe, Esmya, metronidazole vaginal gel 1.5%, the progestin-only contraceptive patch and other women's health products in development through its recent buyout of Uteron Pharma SA.

Bisaro said the Warner Chilcott transaction also gives Actavis a broader portfolio of specialty products that have the potential to be commercialized outside North America.

Warner Chilcott shareholders would own a 23 percent stake in the new company.

Warner Chilcott PLC shareholders will receive 0.160 shares of the new company for each share they own. This equals $20.08 per share, which is a 5 percent premium to Friday's closing price of $19.21. Actavis Inc. shareholders will receive one share of the new company for each share they own at closing.

Both companies' boards unanimously approved the deal, which is expected to close by year's end. It still needs the approval of the majority of shareholders of both companies.

Shares of the new company are expected to trade under the "ACT" ticker symbol on the New York Stock Exchange.

Shares of Actavis climbed $3.20, or 2.6 percent, to $128.70 in Monday premarket trading, while Warner Chilcott's stock gained 64 cents, or 3.3 percent, to $19.85.

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