Pernod Ricard is looking to acquire Allied Domecq. The French drinks company confirmed today (5 April) that it is looking to buy AD with Fortune Brands.

"Discussions with Allied Domecq are at an early stage," Pernod Ricard said in a statement, "and there can be no certainty that an offer for Allied Domecq will ultimately be forthcoming.

"A further announcement will be made in due course," the company concluded.

Yesterday, just-drinks reported that Fortune Brands, which owns Jim Beam Bourbon, has appointed CSFB to target acquisitions in Europe. Speculation mounted that the US company was considering a joint move for Allied Domecq.

In February, it was rumoured that Pernod Ricard had begun talks with its US rival Jim Beam Brands, owned by Fortune Brands, about a possible joint bid for Allied. Earlier in the month, Pernod had asked J.P. Morgan and Morgan Stanley to explore potential acquisitions among a list of companies that would allow it to expand its global reach.

The combined bid by Pernod and Fortune was seen as a way of allaying fears that a bid from Pernod alone would run into competition problems. A combined bid such as this would also help to dampen concerns about Pernod financing such a bid on its own.

The two companies would benefit from significant distribution gains, although it looks as if they will be forced to pay for them.

Shares in Allied Domecq have rocketed on the news, jumping 91 pence to 628p at 12.05 pm.

The news agency AFX, citing industry sources, today said a firm offer could be made "in a couple of weeks" and could value the company at over £7.5 bln, or 670-680 pence a share.