Fideuram Wargny has upgraded its rating of Pernod Ricard to 'buy' from 'hold'. Its analysts argue that the merger talks with Allied Domecq are a catalyst for share growth.

"This acquisition is the catalyst we were waiting for," the analysts said, adding: "so we are back to 'buy' on a cheap share that is showing its aim to be an active player in its sector."

Fideuram Wargny said an offer on Allied could be at around 640 pence, giving it an enterprise value of nearly €14 bln, including debt, compared to €9.7 bln for Pernod itself. This price would be cut by the expected disposals.