Diageo has decided not to proceed with its acquisition of Montana from Pernod Ricard as part of Pernod's acquisition of Allied Domecq. Following the announcement, Dresdner Kleinwort Wasserstein dropped its Ebita forecast for Diageo in 2006 by 1.3% and raised it by 3.8% for Pernod Ricard. The bank reiterated its ‘Buy’ recommendation on Pernod and ‘Add’ recommendation on Diageo.