Confirmed: Lovefilm Considering Sell-Off Options
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DVD-by-post rental business Lovefilm told us it is reviewing some kind of sell-off options, after earlier FT reports hinted at a deal. A spokesperson told us: “We can confirm Lovefilm has received approaches and the board is considering options on on behalf of the group and its shareholders.”
SEE ALSO: Lloyds Pays Off Lovefilm Debt To Fund VOD Venture
Investment bank Jeffries has been appointed to coordinate the deal. But what kind of offers have been made, and what shape the deal might take, isn’t yet clear - FT.com suggested some VC backers now want to exit: “Discussions are focusing on new investors acquiring a majority stake rather than a full buy-out of existing shareholders”.
Lovefilm has been coming in to its own during the recession, with heavy marketing outlay tempting hard-press viewers to stay home and get movies through the post. We understand the company has added 200,000 customers in the last six months, now up to a 1.2 million total, and that it’s aiming to break through £100 million revenue this year, charging between £3.91 and £15.65 per month.
It’s thought Amazon (NSDQ: AMZN) now owns just under a third of Lovefilm, after the bookseller put its UK and German DVD rental businesses in to the company last year. Remaining shareholders include Arts Alliance Media, Index Ventures, Balderton Capital, DFJ Esprit and company management. Speculation on those “new investors” may centre on Netflix (NSDQ: NFLX) - the US DVD renter could be seen as a natural counterpart.
Posted In: Entertainment, Movies, Money, M&A & Venture Capital, Mergers & Acquisitions
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