Bermuda-based rum producer Bacardi has lost a bid for Seagram's wines and spirits, it was reported yesterday.

Bacardi, Jack Daniel's whiskey maker Brown-Forman and Absolut vodka owner Vin & Sprit are believed to have made a bid worth just under $8 billion.

But they lost out to Britain's Diageo and France's Pernod-Ricard, who are jointly buying Seagram for around $8.2 billion.

It will be the world's biggest alcoholic drinks deal.

The Anglo-French camp is set to unveil details of the deal today to divide the world's third largest spirits empire between them, a move which could trigger a round of further rationalisation in the global spirits industry.

Diageo and Pernod made their bid for Seagram's Chivas Regal Scotch whisky to Captain Morgan rum empire.

Uncertainty surrounded the deal for a while when the Diageo-Pernod team threatened to pull out unless it got an early response from French seller Vivendi Universal. But the prospect of Diageo-Pernod walking away soon got the parties talking again.

A deal had yet to be signed by Diageo's Finance Director Nick Rose and Pernod officials at the offices of auction organiser Morgan Stanley and Seagram's lawyers Simpson, Thacher and Bartlett in New York, but this was considered a formality and an announcement was planned for early today, the sources said.

"After a late upset this afternoon, the deal is all but signed and is set to be announced early on Tuesday in London,'' said one source close to the auction process.

Diageo and Morgan Stanley in London declined to comment on the auction process.

The industry sources said Vivendi had called an emergency board meeting in Paris on Monday afternoon to rubber stamp a deal, but Vivendi declined to comment.

The move will extend Diageo's lead in the world's spirits market where it is already twice as large as second player Allied Domecq, while Pernod, currently number five, will start to challenge Allied for that second spot. Analysts said the deal could lead to rationalistion deals among other industry players such as the three members of the losing consortium, as well as Jim Beam maker Fortune Brands and Remy Cointreau.

France's Vivendi put Seagram up for sale in September as part of its merger with Seagram's entertainment businesses to form Vivendi Universal.

Diageo, famed for its Johnnie Walker Scotch whisky and Smirnoff vodka, is believed to want Seagram's Captain Morgan dark rum, its Crown Royal and VO Canadian whiskies, and 7 Crowns American blended whiskey, while the Sterling Californian wines business would be added to Diageo's Napa Valley wines.

In a spirits industry which has seen sluggish volume rises, Diageo is keen to get its hands on Captain Morgan -- the fastest growing of Seagram's top ten brands with volumes up 19 percent in 1999. Crown Royal was 9.1 percent ahead.

Pernod, with its aniseed-based drinks Ricard and Pastis 51 and Jameson's Irish whiskey would pick up Seagram's Scotch whisky operations, including Chivas Regal, Passport and Glenlivet single malt, and also Seagram's Gin. In 1999 Chivas Regal volumes were flat and Seagram Gin was off four percent.

Seagram's Martell cognac, the world's number three cognac after Hennessy and Remy Martin and Seagram's third most valuable brand after Chivas Regal and Crown Royal, is to be sold off and parties such as Remy have shown an interest.

Industry analyst Ian Shackleton at Credit Suisse First Boston said that if the deal was confirmed as expected, then it looked like a win for Diageo but mixed news for Pernod and Allied.

He expects Diageo to pay around $3.5 billion for brands with annual earnings of just under $250 million, while Pernod will pay around the same for brands with earnings of $300 million. A further $1 billion worth of brands, including Martell, are expected to be sold off.

Bacardi bid He has Diageo as a buy with a target price of 760 pence, but there are worries over Pernod issued shares to pay for the deal while Allied could drift after it lost out on Seagram.

Allied pulled out of the auction last week and says it has secured the rights to Captain Morgan through a deal with the Puerto Rican rum supplier Destileria Serralles if the brand changes hands, a claim Seagram strongly disputes.

Diageo shares closed up 16 pence at 716-1/2p, while Pernod ended up 0.32 percent at 62.70 euros.