Rumours Dunelm Group (LON:DNLM) is looking to buy DIY chain Homebase were squashed on Wednesday by its chief executive.
John Browett, CEO, refuted the claims, saying the firm was “flatly not interested in taking it [Homebase] over.”
Weekend reports suggest Dunelm could buy the DIY chain and break up its store estate, adding that the firm was in talks with private equity firms.
But Browett denied this, saying there were “only a handful of Homebase stores that we would have any interest in and, of those, just a few that we would be confident we could make work”.
Shares in the company dropped around 4%, or 37p, to 868p, as its latest trading statement underwhelmed investors.
Like-for-like sales slipped 0.8% in the 13 weeks to January 2, compared with the same period the year before, but this weaker than expected.
The figures, however, exclude Dunelm's winter sale, which boosted growth by £10m and was stripped out to make a fair comparison.
Broker Cantor Fitzgerald said: “Overall the update was worse than our expectations with sales being well behind the curve but gross margins ahead.”