The Anglo-French team of Diageo and Pernod-Ricard is seen as the preferred bidder for Seagram's drinks empire, putting it ahead of a rival team led by Bacardi, industry sources said yesterday.
Lawyers from the Diageo-Pernod team were heading across the Atlantic to go through the details at the offices of investment bank Morgan Stanley and the winner is set to be notified by the close of business in New York today.
Industry sources said an estimated $8 billion deal was likely to be signed tomorrow or over the weekend by the Diageo-Pernod team, and an official announcement made on Monday.
The Anglo-French team was left in pole position after arch-rival Allied Domecq pulled out of the race, and the Bacardi-led bid failed to match the price and financial guarantees offered by the Diageo-Pernod camp.
A Diageo spokesman declined to comment on the Seagram auction process. Neither Seagram nor Morgan Stanley was available for comment.
Attention will focus on Morgan Stanley's offices in New York as teams of lawyers and bankers meet to hammer out a deal leaving Diageo and Pernod with the prize. The team of privately-owned rum producer Bacardi, Jack Daniel's whiskey maker Brown-Forman, and Absolut vodka owner Vin & Sprit would be left in the cold.
The Diageo-Pernod team has been regarded as the favourite as it has the cash to move quickly, and also its deal to split up the Seagram top brands, such as Chivas Regal Scotch and Captain Morgan rum, between the two companies could avoid any potential problems with competition authorities.
France's Vivendi put Seagram, the world's third-largest spirits business after Diageo and Allied, up for sale in September as part of its merger with Seagram's entertainment businesses.
