Seagram Reportedly Zeroing In On Buyer For Spirits Business

Johnnie Walker might just join Scotch whisky rival Chivas Regal if the Anglo-French team of Diageo and Pernod-Ricard win their bid for Seagram's (VO Quote) spirits business.

Reports say a deal could close this week. French water and communications provider Vivendi(V Quote), which recently acquired Canada's Seagram for $24 billion, put Seagram's wine and spirits business on the auction block in September. Auction organizer Morgan Stanley hopes to complete the deal before Christmas.

According to published reports, the team of Diageo and Pernod-Ricard, of Johnnie Walker fame, is the favorite to win the auction for Seagram's spirits empire, which industry sources say could fetch up to $8 billion. Other bidders include Great Britain's Allied Domecq, Brown-Forman (BFA Quote), owner of Jack Daniel's Tennessee whiskey, and Bermuda's Bacardi.

Industry sources say the number of bidders will be slimmed down to two by Wednesday, and a winner could be decided by the end of the week.

Shares of Seagram were lately unchanged at $50.50, while shares of Vivendi gained $2.50, or 3.85%, to $67.50 in trading on the Big Board.