Three spirits companies have submitted bids for Malibu, the coconut rum brand being auctioned by Diageo, the UK drinks group.
Allied Domecq is favourite to land the label with Fortune Brands of the US and French group Pernod Ricard in hot pursuit.
Diageo put Malibu up for sale in December last year.
US antitrust authorities insisted Diageo sold the white rum brand as a condition for clearing its £5.7bn acquisition of the Seagram drinks portfolio, made jointly with Pernod.
Malibu, the third biggest selling rum in the US after Bacardi and Captain Morgan, is the most significant brand to be sold as a direct result of the ruling.
Diageo believes it can raise between $900m and $1bn for the brand.
Illinois-based Fortune Brands, which makes Jim Beam whiskey and Titleist golf balls, or Pernod, which makes the rival Wild Turkey bourbon, may consider offering other drinks brands to Diageo as part payment for Malibu.
But Allied Domecq, which is understood to have bid about $600m, is believed to be in a strong position to buy the business as it is embroiled in a legal dispute affecting Diageo.
The sale of Captain Morgan to Diageo is being contested in a Puerto Rican court by Destileria Serralles, a local distiller that claims it has a right of refusal over the brand. Serralles is trying to win the brand for Allied Domecq.
Allied could withdraw from the fray if it were to strike a favourable Malibu deal.
Related stories:
Diageo given nod on Seagram deal but must drop Malibu (20 December 2001)
Diageo set to drop Malibu to save deal (1 November 2001)
Seagram sale blocked in the US (24 October 2001)