Constellation is expected to launch a counter-bid for Allied Domecq by the end of this month, according to press reports. The winemaker, which has been looking at Allied's financial details over the last few days, is poised to offer up to GBP8bn for the company.

The Sunday Herald quotes an unnamed source close to the Constellation-led consortium - which includes Brown-Forman and private equity groups Blackstone and Lion Capital - as saying, "We expect an offer of more than 700 pence per share to be made within two weeks and certainly by the end of the month."

"There are not many opportunities of this size," the source told the paper.

The consortium has received secondary support from leading drinks groups including Diageo, William Grant & Sons and the Italian drinks company Davide Campari-Milano, the paper claimed. The drinks companies backing Constellation's break-up bid for Allied are understood to have committed to buying certain brands once the deal completes, in exchange for cash. The source said: "There are parallels with what Pernod had agreed with Fortune."

Pernod's offer for Allied, which has been recommended by the UK-based drinks company's board, weighs in at 670 pence per share, valuing the company at around GBP7.4bn (US$14bn).

Industry sources cited by the Sunday Herald suggested that Diageo is eyeing both Allied's Maker's Mark bourbon and Courvoisier cognac. The world's largest drinks company, with a dominant share of the Scotch whisky market, is said to be coveting Courvoisier because its current relationship with Hennessy cognac parent LVMH is disintegrating, leaving a gap in its portfolio, the paper said.

Meanwhile, Les Echos claims that observers expect bidding for Allied to go as high as about 725 pence, with 750 pence as the upper limit. Analysts say that this is not unrealistic, the French paper said, given the synergies which the acquisition could generate.