SMG-owned Virgin Radio could be sold to Absolute Radio as a going concern but without the Virgin brand, as it emerged that Sir Richard Branson is considering relaunching Virgin Radio in Britain.

Following discussions between Absolute, SMG and Virgin Group, which has the right not to allow the brand to fall into the hands of anyone who competes with Virgin businesses anywhere in the world, it is understood that SMG is leaning towards an unbranded deal.

It was previously thought that Absolute Radio, the private radio group, would not want to buy Virgin Radio if it could not keep the Virgin brand.

An announcement regarding the sale of Virgin Radio, which owns an FM licence in London and an AM national licence, is thought to be close. However, negotiations are continuing and the situation regarding brand ownership could change.

The radio station was expected to be sold by late April, but the competition issues are thought to have delayed completion.

Virgin Group has a joint radio venture with the Hindustan Times, where it uses the Virgin Radio brand. One of Absolute’s backers is The Times of India’s owner Bennett Coleman, which owns radio stations in India. Virgin is concerned that it is too confusing for two Indian businesses to have a relationship with Virgin Radio.

It is also understood that Virgin Group, which owns Virgin Radio in countries throughout Europe and Asia, is keen to reclaim the Virgin Radio brand and launch a British station, possibly on DAB. It is understood that Virgin Group would look to relaunch Virgin Radio with a partner.

SMG is selling Virgin Radio so it can concentrate on its television businesses, which include STV in Scotland and Ginger Productions. SMG acquired the radio business alongside Ginger Productions from Chris Evans, the broadcaster, in 2000 for £225 million.

Absolute Radio is run by Donnach O’Driscoll, the chief executive, who spent two years as head of international development at Capital Radio. Landmark Developments is the main shareholder of Absolute Radio.

An acquisition of Virgin Radio by Absolute would mean that yet another radio business has entered private hands. Global Radio, a private radio group, recently agreed to acquire GCap, Britain’s largest commercial radio group.

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