Amazon 'set to make Lovefilm buyout offer'

Internet retail giant Amazon is circling movie rental service Lovefilm in a deal that could value it at nearly £200m (€233m), it was reported today.

The books-to-electronic-goods retailer is understood to be carrying out due diligence on the business that is expected to lead to a buyout offer being made during the next few months, according to the Sunday Times newspaper.

Takeover talks are understood to have gathered pace when Lovefilm started to consider a stock market flotation.

Amazon already holds a 42% stake in Lovefilm following a tie-up with its European film rental business in 2008. Other shareholders include technology backers Arts Alliance and Index Ventures.

Lovefilm has more than 1.4 million members across Europe. In exchange for a monthly fee, users can select films and games from the group’s library of 70,000 titles.

Films are either posted to users or they can be downloaded electronically.