Shares in Allied Domecq reached a record high yesterday as speculation increased that Constellation wines and Brown-Forman would launched a formal bid for the Bristol-based drinks company.

Allied’s shares have risen 5% since the two companies formed their consortium on April 22, closing yesterday at 695p.

It is thought that the group’s potential bid would value Allied at £7.75bn, £350m more than that of French-company Pernod Ricard, which was accepted by the Allied board last month.

Speculation has also increased that Diageo could join forces with the Constellation group as the best way to get involved in the deal.

Speaking in New York, joint MD at Pernod, Pierre Pringuet said that he did not feel any pressure to consider upping its offer.