French drinks giant Pernod Ricard has confirmed it is looking to buy UK-based counterpart Allied Domecq.

The French spirits group, which also owns several wine brands including Jacob’s Creek, said it was currently holding talks with regard to a possible takeover.

Fortune Brands, a US consumer products group, also indicated today that it is working with Pernod Ricard with a view to launching a joint bid for Allied.

Share prices in Allied, whose brands include Perrier-Jouët, Cockburns and Clos du Bois, soared by nearly 18% as investors predicted a bid for the company of around £7.2b (US$13.5b) – its estimated value.

Stock exchange insiders have reportedly said a firm offer could be made within weeks although those involved have refused to comment on any future deal.

‘These discussions are at an early stage and there can be no certainty that an offer will ultimately be forthcoming,’ said an Allied press release.

The takeover, if it occurs, would make Pernod Ricard a challenger to London-based Diageo, currently the world’s biggest drinks group which, among others, owns Justerini & Brooks wines, Sterling Vineyards and Blossom Hill.

Written by Oliver Styles