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Allen, who's absence from the Town reserve side yesterday further boosted the rumours, is said to be keen on a move away from Blundell Park if first team football is offered.
However, with Craig Dudley currently at Glanford Park on loan from second division Oldham Athletic and Pat McGibbon also on loan terms the deal will have to be permanent.
This means that Allen will have to come to an agreement with the North East Lincs outfit over a contract settlement before moving down the A180 to Glanford Park.
Town have refused to comment on speculation, though it has been claimed in other media that the striker has already been to GP to discuss a move.