Amazon is understood to have made a takeover offer for online movie rental firm Lovefilm, valuing the business at close to £200m.

According to the Sunday Times, Amazon made the approach last week.

In 2008 Amazon combined its European rental operations with Lovefilm before taking up a 42% stake in the online rental service after buying out one of the company’s venture capital backers.

Lovefilm, which is currently privately owned, is understood to be considering a stock market flotation.

Last year investment bank Jeffries was hired to assess Lovefilm’s strategic options, including an initial public offering. It has yet to make this move though.

Lovefilm has more than 1.4 million members and a catalogue of over 67,000 films and games.

Lovefilm and Amazon declined to comment to the paper.