Bermuda-based distiller Bacardi has taken another step towards a possible initial public offering after its controlling family gave directors the power to issue new shares.

Bacardi has completed two of the three steps needed to authorise a stock market listing or a share-funded deal with an industry rival, the Financial Times reported.

The FT said the move has increased speculation in the spirits trade about more consolidation, with French group Pernod Ricard seen as a potential bidder for Allied Domecq, the UK maker of Ballantine's whisky.

The paper added that if Bacardi went for an IPO, it would have to wait until January 1 2005, but that this would not apply to a non-IPO share issue.