US giant Amazon has made a £200m bid for online DVD rental firm, LoveFilm, it has been reported.
The news is yet to be confirmed by either company, although an acquisition by Amazon – which currently owns 42% of LoveFilm after it bought out one of its venture capital backers – would make sense in the context of its plans for expansion. The two companies also have experience working together, after Amazon combined its European rental operation with Lovefilm in 2008
LoveFilm’s annual loss fell to £1.2m in 2008 and the company generated around £73m of turnover, when CEO Simon Calver told Growing Business that turnover would breach £100m in 2009.
It is believed that Amazon’s takeover could give the UK business a stronger position in the European market, as LoveFilm heads towards the digital market by offering online movie streaming. Amazon has expertise in digital services with its Kindle device, which offers digital book purchase and lately it has offered downloadable TV shows.
LoveFilm, which is privately owned, is now Europe’s leading rental subscription service with over 1.4 million members and operates in the UK, Sweden, Norway, Denmark and Germany.