Takeover talks between UB Group and Whyte & Mackay are still ongoing, according to the chairman of the Indian drinks giant.

UB chairman Vijay Mallya said the two companies are still negotiating over a possible takeover of the UK distiller, according to a report from the Asia Pulse news agency today (24 January).

"We are negotiating with owners but we do not wish to overpay and stress ourselves," Mallya was quoted as saying as he announced the latest figures from UB distilling arm United Spirits.

According to the report, Mallya believes that India is a growth market for Scotch whisky. He added: "Without acquisition we would miss a growth opportunity."

UB and Whyte & Mackay began takeover talks last October but discussions were believed to have hit a snag over the price demanded by Whyte & Mackay's chairman and chief executive Vivian Imerman.

Last month, industry sources claimed a deal could be finalised by the end of January as the two companies edged close to an agreement on price.

Whyte & Mackay refused to comment on the reports while UB officials could not be reached for comment as just-drinks went to press.

United Spirits, the distilling arm of India's UB Group, saw third-quarter profits more than double, the company said.

The group, which produces brands including McDowell's whisky, posted operating profit of INR1.4bn (US$31.6m) for the three months to the end of December last year. In the corresponding period in 2005, UB's distilling arm reported profits of INR511.9m.

Chairman Vijay Mallya said earnings during the quarter were boosted by the company's integration of the Shaw Wallace business it acquired in 2005. "The reason for the huge jump in profits is because of the US$300m acquisition of Shaw Wallace. The integration process of the Shaw Wallace with UB has been successful," Mallya said, according to the Asia Pulse news agency.

Net sales for the third quarter reached INR7.7bn, leaping from INR3.9bn a year ago.