Has the chemistry gone? Will Boots flog Halfords?

According to The Sunday Times, a Boots The Chemists spokesman said:

“Halfords is performing well and generating shareholder returns. We are very happy to have it in our portfolio. But it does not fit with our strategic intent."

The chain is not officially up for sale and the businessman the Sunday Times names as the main bidder says news of his interest is just speculation.

However, that didn’t stop the Sunday Times saying the chain might fall into Steven Cain’s hands for £400m. No formal approach has yet been made.

Cain is the former Carlton Communications PLC chief executive and is said to have raised private-equity backing for his bid. The Sunday Times claims other finance houses interested in the 410-store chain include Charterhouse Development Capital, Duke Street Capital, Schroder Ventures and 3i.

Over the last two years Boots has invested £47m in Halfords, something that will hit this year’s profits. Halfords made £45.2m in 2000. Boots The Chemists – and with it Halfords – announce their annual results at the end of May.

There was similar ‘Halfords is for sale’ speculation last year. Boots has recently been offloading some of its non-core businesses in an effort to reassure the City that it can beat off stiff competition from supermarkets who are increasingly encroaching on its health-and-beauty heartland.

However, today Francis Thomas, a Boots spokesman, said Boots had no plans to sell Halfords, and had not received an offer for the chain..

"We have received no offer for Halfords from anyone and we have no plans to put Halfords up for sale," Thomas said.

Halfords is not ailing. The 76 stores given Bikehut/Ripspeed makeovers so far have seen sales rise by 20 percent.

"Halfords does not fit with our strategy but we are happy to own it, happy to invest in it. It’s not a problem child, it makes an awful lot of money… and continues to add to

shareholder value," said Thomas.

Shares in Boots were unchanged at 610 pence this morning at 9am. The stock, off its year low of 539, has underperfomed the wider retail sector by more than 10 percent since January.