Pernod Ricard has confirmed that it will make an offer for Allied Domecq this week, according to yesterday's press reports.

Les Echos said that the French drinks company has said it is aiming to make the offer by Thursday (21 April), when Allied will present its half year results. Pernod is expected to offer between 670 and 680 pence per share, valuing Allied at about €10.9bn, Les Echos noted. Including the assumption of debt, however, Allied could be worth over €13.2bn. Fortune is expected to pay about €2bn to acquire some of Allied's brands, the paper said.

A source close to the matter also told Reuters yesterday: "They're expecting to have all the work done by tonight (Monday); then they'll go back to the board and confirm the terms." The boards of the three companies would then meet separately to vote on the deal in time to announce it on Thursday, the source told Reuters.

The news agency also added that Fortune would pay Pernod about GBP2.8bn upfront and Pernod would then hand over a number of agreed brands to the US company on completion of the deal.

"The total consideration is about GBP7.4bn, of which 80% is cash and 20% is equity," the source told Reuters, referring to the portions of cash, raised as debt, and shares Pernod would use to fund the deal.

"And of the 80%, about GBP2.8bn is part-funded by Fortune," the source added.

Under the proposed deal, Reuters said, Fortune is expected to acquire Allied's Courvoisier cognac, as Pernod already owns competing Martell, and also possibly either Allied's Beefeater or Pernod's Larios gin, depending on which Pernod would decide to keep.

The Daily Telegraph, meanwhile, warned today that it could be several months before a formal offer emerges. Citing a research note from Merrill Lynch, the paper quoted the analyst saying: "Any bid for Allied Domecq from Pernod/Fortune is unlikely to emerge for at least two months."