LoveFilm considers takeover offers

LoveFilm, the online DVD rental firm that is part-owned by Amazon, is reportedly considering takeover offers from a number of private equity firms including KKR and Silver Lake Partners. The company is reportedly being valued at GBP200m (USD325m) and is considering options that include selling a majority share of the business or launching an IPO.

"The company has received a number of approaches and the board is exploring options on behalf of the group and its shareholders," a LoveFilm spokesperson said, without commenting further.

Currently, LoveFilm's management owns 7%of the company, while Amazon is a 32% shareholder after striking a deal last year. Four VC firms – Arts Alliance Media, Index Ventures, Balderton Capital and DFJ Esprit – are reportedly listed as other shareholders. LoveFilm has reportedly appointed investment bank Jefferies to govern a possible sale of the business.

According to a Financial Times report, some of these VC firms are looking to sell up, with other US-based VCs hoping to buy a majority share of the firm. A separate report in the Sunday Times claims that LoveFilm's management, headed by CEO Simon Calver, could personally collect GBP14m (USD23m) from a GBP200m (USD325m) sale.

Potential buyers may be spurred by the success of LoveFilm's US rival Netflix. LoveFilm is currently trying to recreate the success of Netflix by trialling a new video-on-demand download service. LoveFilm reportedly generated GBP72m (USD117m) in revenues last year, and is the UK's leading film rental service in the UK with some 1.2m users.