Allied Domecq may be setting its sights higher than acquiring Malibu or Captain Morgan rums ­ with some analysts now predicting a merger with Bacardi is next on its agenda. The speculation comes as Diageo looks at how to ensure the US competition authorities approve its joint buy with Pernod Ricard of Seagram. Diageo said: "We are looking at all our options. The sale of Malibu is just one. We have been approached by potential buyers for Malibu." As part of the Seagram deal, Diageo will acquire Captain Morgan. But Allied claims to have first refusal on the rum brand under a deal with Destileria Serralles. Allied director of corporate affairs Jane Mussared said Captain Morgan would be a "plum" acquisition. "We believe Captain Morgan can rightfully become ours, and if we buy it we could not take on Malibu," she said. Nevertheless, analysts say a merger with Bacardi could more attractive. One said: "Allied's ceo Philip Bowman said he is more interested in merging than buying a trophy brand." Another said: "There is more room for consolidation in the drinks industry and Bacardi would not cause competition issues." l Allied announced a 12% rise in pre-tax profit to £453m for the year to August 31 on sales up 11% to £2.9bn. It plans to split its wines and spirits operations into separate divisions in January. {{NEWS }}