Brazil's richest man is reportedly eyeing up a bid for drinks giant Diageo, driving shares in the Smirnoff Vodka to Johnnie Walker whisky group up to a near record seven year high.

Brazilian media reports at the weekend suggested that Jorge Paulo Lemann - who founded private equity firm 3G Capital - and his partners Marcel Telles and Beto Sicupira are drafting a buyout offer for the FTSE 100 company.

As a result, Diageo shares were sitting comfortably at the top of the UK blue chip leader board, having jumped 8.7 per cent at the open to score its its biggest gain one-day gain since October 2008. Shares eased back since but were still up 7 per cent, or 119.5p, at 1,880.0p in late morning trade.

Thirsty work: Brazil's richest man Jorge Paulo Lemann has his eyes set on buying the Guinness maker Diageo

Will Hedden, at London Capital Group, said: 'Shares in the Guinness-to-Smirnoff maker are brewing up on its main London listing, mirroring gains made in Friday on its US-listed shares as talk of an approach in the wings led from Brazil continue to ferment.'

'Diageo has built up quite a head over initial reports in the Brazilian media about a possible approach from 3G Capital helping the stock move further from year to date lows of under £18.'

Lemann has form in the drinks and consumer goods space, embarking on a shopping spree in recent years that includes buying Burger King from Diageo in 2010 and snapping up Heinz in 2013 in partnership with US billionaire Warren Buffett. In March, the pair unveiled a merger of the ketchup maker with Kraft.

Harvard-educated Lemann is the chief investor and strategist at 3G Capital. His private equity company controls 65 per cent of the Brazilian beer market and have also snapped up assets abroad, merging with Belgium's Interbrew in 2004 to form InBev, which bought US brewer Anheuser-Busch in 2008.

Last month shares in Peroni and Grolsch maker SABMiller jumped on reports that 3G Capital was teaming up with Buffett and Anheuser-Busch InBev for a takeover approach.

SABMiller shares were also marginally higher today, up 7.0p at 3,372.0p.

Famous brands: Scotch whisky Johnnie Walker is one of Diageo's most well-known drinks

Mike van Dulken, head of research at Accendo Markets, said: 'Shares in distiller Diageo are easily outperforming FTSE100 peers this morning, and its points contribution is keeping the index around breakeven for the day.'

'The news adds fizz back to recently hindered Diageo shares and offsets late-March speculation that the South-American predator was more interested in food than drink, electing to pursue Kraft for a tie-up with previously-acquired Heinz - which in turn suggested a bid for fellow brewer SABMiller by Anheuser-Busch InBev was off the table.'

Diageo has struggled lately and in April it revealed net sales fell 0.7 per cent in the last quarter on flagging global demand and the after-effects of a weak economic recovery.

Chris Beauchamp, Senior Market Analyst, at IG said: ‘The industry has been a hot-spot of M&A activity, with smaller brands being picked up by major names looking to boost their appeal in niche products, but this is a deal of a different order of magnitude.

‘Given the amount needed to actually succeed, this bid could either be a crowning glory for Mr Lemann or a moment of extreme hubris. At any rate, it has certainly allowed Diageo to move ahead of its rival SABMiller in performance terms for the year so far.’

Aside from Diageo, blue chip bid chatter also alighted on BT Group today, with its shares gaining 4.1p at 443.4p after the Daily Telegraph reported that senior industry executives and City analysts suggested that the telecoms carrier is set to become a takeover target for Deutsche Telekom as an international telecoms merger frenzy intensifies,