Virgin moves into Irish radio

Branson's pop-rock-talk format set for expansion on European airwaves

MATHEW HORSMAN

Media Editor

Richard Branson's Virgin Group is poised to launch its soft rock commercial radio format in Dublin, following a preliminary agreement to invest in FM104, the Irish radio station.

The move marks the further development of Virgin's media expansion plans, in the wake of its failure to win the Channel 5 licence.

The radio deal, to be announced this week, will see Virgin take a 27 per cent stake in the privately held station, and assume management responsibilities. The station will be rebranded as Virgin.

Mr Branson's company currently operates two radio licences in the UK, and is looking at expanding on the Continent. It is believed to be in early talks with joint venture partners in Spain, France, Italy and Germany, with the aim of extending the successful pop-rock-talk mix beyond Britain.

The radio push is part of a broader expansion into media, including CD- Rom publishing, television and books. Chief strategist for Virgin Communications, the media arm of the airline-to-cola conglomerate, is Robert Devereux, Mr Branson's brother-in-law, who is known within the company as a deal- maker rather than an operations man. On the TV side, he is seconded by Jeremy Fox, who is now in preliminary talks with other broadcasters about the prospects for developing a branded Virgin TV channel on cable or satellite.

It is understood that informal discussions have taken place between Virgin and BSkyB, the satellite broadcaster owned 40 per cent by Rupert Murdoch. Sky is currently conducting a review of its multi-channel package, consisting of 28 themed channels such as Sky Sports, Playboy and Sky Movies, and is believed to be looking for additional products.

Virgin is also in talks with Reed-Elsevier, the Anglo-Dutch publishing giant, over the purchase of Reed Consumer Books, being sold as part of Reed's strategic shift toward electronic and professional publishing. Virgin is believed to be one of two companies still in the running for the range of book publishing imprints, including Secker & Warburg and Methuen, which could fetch between pounds 80m and pounds 100m. The other bidder is Electra, the venture capital group.

Mr Devereux's latest acquisition, the 120-strong MGM cinema chain for which it paid pounds 190m last year, is now being redeveloped and rebranded. The company intends to sell the bulk of the single-screen MGM sites, perhaps as many as 80, in order to concentrate on the higher-margin multiplex end of the market. It is in talks with CinVen, the venture capital group, and a deal priced at about pounds 70m could be reached soon.

The proceeds would accelerate plans to open new multiplexes across the UK. A Virgin Cinema has now been opened in Dublin, and there are plans to open a greenfield property in Rochester, Kent, this summer, incorporating a cinema, restaurant and games centre. A cinema is also part of plans to redevelop the King's Cross, London, site near the proposed Channel Tunnel link rail station.