PRESS DIGEST - British Sunday business press - JULY 6

Sunday, 6 July 2008

The Sunday Times

RBS SEEKS CARE MERGER FOR PRIORY

The Royal Bank of Scotland(RBS.L) is considering merging the Priory and Four Seasons, a move that would lead to a major reorganisation of Britain's healthcare sector. A merger would see a company with an enterprise value of at least two billion pounds being created and is seen as a solution to RBS's exposure to the two heavily indebted companies. RBS acquired the Priory, which has debts of around 800 million pounds, when it took over ABN Amro, and is also lead lender to Four Seasons which owes 1.3 billion pounds.

A&L AIMS TO SAVE 80 MILLION POUNDS ON DIVIDEND

Alliance & LeicesterALLL.L is preparing to make a massive dividend cut in order to shore up its finances in a move which is expected to save the bank about 80 million pounds a year. On Friday, A&L's shares dropped 12 per cent in reaction to the emergency bail-out of Bradford & BingleyBB.L. Chief executive David Bennett is said to have begun considering a dividend cut shortly after the bank revealed its full-year results in February. The mortgage bank's shares are trading on a dividend yield of 20 per cent. Shares closed on Friday at 255 pence.