Branson sets sights on Virgin Radio

LONDON (Reuters) - Entrepreneur Richard Branson and former ITV commercial television chief Charles Allen could launch a takeover of SMG's SMG.L Virgin Radio, the Observer newspaper said on Sunday without citing sources.

Allen refused to comment on the project, adding: "I am bound by confidentiality agreements," the newspaper said.

Branson and Allen have held talks about a plan that would see Virgin Radio owner the Scottish media group SMG spin off the station into a new private company involving the two men and SMG becoming principle shareholders, the paper said.

SMG said last week its planned flotation of Virgin Radio was on track. A spokeswoman could not immediately be reached for comment.