News of the talks sent Scoot's shares up 16% to 360p in London trading this afternoon, up from last night's close of 300p. At the height of the dotcom boom last March, the shares had reached 351.5p.
The sale is part of a strategic review the company recently initiated.
Scoot paid £180m for Loot last year and the sale of the paper could be a lifeline for the group, which is running out of cash. Two weeks ago, the company said it did not have the £22m it needed to continue trading after the end of August.
It is expected that the company will make a large loss in this sale. Scoot said that it would make a further announcement "when appropriate".
Scoot had been in talks about a sale to Vivendi, but these fell through.