Pernod is reportedly working to place an offer that coincides with Allied Domecq's interim results announcement due on Thursday.
The exact details of any bid are still unknown yet the deal may be becoming more expensive every day with Allied's shares hitting 645p at the end of business yesterday, up from around 524p at the start of April.
Speculation about a takeover of Allied Domecq has been rife since the beginning of this year.
For 2004 the group, which produces the Malibu, Beefeater gin and Courvoisier brandy labels, reported a zero rate of sales growth, due mainly to the increasingly competitive global trading conditions.
But, any deal with Pernod and Fortune may face problems when laid before competition authorities due to the resultant market concentration. For example, analysts said the companies could potentially control 60 per cent of the UK cognac market.
It is thought Pernod and Fortune would split a number of Allied's brands between them, yet speculation has grown that any deal might require the two to drop some brands to appease regulators.
A successful bid would, however, enable France-based Pernod and US based Fortune to mount a greater challenge against the world's largest spirits maker, the UK's Diageo, which is thought to have a value of almost £23 million (€33 million).
All firms have continued to play their cards close their chests.
Allied Domecq said in an official statement two weeks ago that: "The Board confirms that it is in discussions with Pernod Ricard, which is working with Fortune Brands, regarding a potential offer for Allied Domecq by Pernod Ricard. These discussions are at an early stage and there can be no certainty that an offer will ultimately be forthcoming."