Amazon to buy Lovefilm

On-line retail giant Amazon has made an offer to buy films-by-post rental service Lovefilm, reports suggest.

According to coverage of the deal in The New York Times, the offer - which has not been confirmed by either Amazon or Lovefilm - values the company at around £200 million.

Lovefilm, famous for being one of the first companies in the UK to offer unlimited films and games by post in return for a monthly fee, is already part-owned by Amazon, which gained a 42 per cent share in the company after combining its own DVD rental service with Lovefilm's back in 2008.

As Lovefilm and Amazon have a history of working together, on the face of it a deal makes sense - but the valuation seems eerily familiar. The Sunday Times reported back in June 2009 that Lovefilm was looking for a buyer, and claimed that the company wanted £200 million - the exact same figure being bandied about in the current deal.

Either the report has its wires crossed, or Lovefilm is admitting that it has completely failed to grow since 2009 - despite increasing its customer base and introducing Blu-ray and console game rentals to its offerings.

Until either Amazon or Lovefilm step forward and explain the terms of the deal - if, indeed, there even is a deal - we'll just have to watch this one with interest.