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"With its market leading positions and the strong performance of its new Arcade format [ie Bikehuts], Halfords is now well placed to continue its development as an independent company," said a statement to the City.
"The Board believes that a demerger of Halfords to its shareholders is the most appropriate method of separation and this process is underway. However Boots is exploring the possibility of sale to see if that will realise greater value for shareholders."
Steve Russell, Boots chief executive, said: "Our focus is on growing our health and beauty businesses. Halfords is an excellent company with a strong management team and a good record of profit growth. I am confident it will thrive as an independent company."
Rod Scribbins, currently MD of Halfords, is the plannd CEO of the demerged business.
A Boots spokesman declined to say if the group has received any offers or expressions
of interest for Halfords.
He said the prospect of further details on the proposed demerger being released
along with Boots’ preliminary results statement on May 30 "depends on how quickly
we can get on."
Boots acquired Halfords in 1989. The 400-store chain reported a restated pretax profit of £42m on turnover of £509m in the year to end March 2001. The management expects profit to exceed £50m for the year to end March 2002.
City analysts welcomed the move by Boots to finally exit Halfords.
"It makes sense, it was never part of the strategy," said one.
Analysts suggested venture capital groups would inevitably cast their eye over Halfords,
but doubted they would offer more than around £500m.
The auto accessory and cycle chain has effectively been up for sale for the past 18 months, say analysts, and as no serious bidder has pitched in with a purchase to date it’s unlikely today’s news – released on Budget day – will see any fresh bidding.
