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Press Digest-Sunday British Business-Jan 26

LONDON, Jan 26 (Reuters) - British newspapers reported the following business stories on Sunday: The Sunday Times U.S. ACTIVIST INVESTOR TARGETS BRITISH GROCERS Activist fund manager Elliott plans to lead a campaign to force grocers Tesco, Sainsbury's and Morrisons to hive off their property into separate listed companies with the supermarkets selling minority stakes.

MOTHERCARE IN TALKS TO SELL EARLY LEARNING CENTRE Retailer Mothercare is in talks with several suitors to sell its Early Learning Centre toy shops as part of a recovery plan after it issued a profit warning two weeks ago.

BUSINESS LEADERS SLAM LABOUR PLAN TO REVIVE 50P TAX RATE Entrepreneurs and executives have hit out at Labour's plan to reintroduce a 50 pence tax rate for high earners. Mike Rake, president of business lobby group CBI and chairman of BT, said the plan would lead to less tax income and the creation of fewer jobs.

WATER COMPANIES PAID INVESTORS 11 BLN POUNDS IN PAST DECADE Britain's big six water companies paid 11 billion pounds ($18.2 billion) in dividends in the past decade while increasing bills by 55 percent and avoiding billions in income tax, according to analysis by The Sunday Times ahead of a crackdown by the industry's regulator.

UBM FACES BREAK-UP AFTER HEDGE FUND RAID Hedge fund Hengistbury has built up a 5.2 percent stake in business publishing and events group UBM, increasing speculation that it will be broken up or will sell its PR Newswire division, worth about 500 million pounds.

RSA COULD SCRAP DIVIDEND TO PLUG BALANCE-SHEET HOLE Insurer RSA is understood to be considering scrapping its dividend to help to raise at least 500 million pounds to plug a hole in its balance sheet.

Sunday Telegraph BARCLAYS WEIGHING END OF PREMIER LEAGUE SPONSORSHIP Barclays is considering ending its 40 million pounds-a-year sponsorship of English soccer's Premier League when its current deal ends in 2016.

PRUDENTIAL TO BACK UK SOCIAL HOUSING Prudential is to support efforts to build about 1,000 new homes by providing long-term financing of 156 million pounds to about 17 local housing associations in Wales.

ARM CHAIRMAN TO STEP DOWN John Buchanan is understood to be preparing to step down as chairman of chip designer ARM for health reasons.

AT&T STOKES VODAFONE BID TALK AT&T Chief Executive Randall Stephenson met EU telecoms commissioner Neelie Kroes in Davos to discuss the potential takeover of a leading European rival, with Vodafone said to be top of his list, Sky News reported.

RBS MAY PLACE BUSINESS BANKING BACK INTO BRANCHES Royal Bank of Scotland is considering putting small business lending back under the control of it branch managers as part of a wider restructuring.

Sunday Express SHOE RETAILER OFFICE COULD BE PUT ON BLOCK Shoe chain Office could be put up for sale in the next 12 months by its private equity owner Silverfleet Capital in a deal worth up to 300 million pounds.

Mail on Sunday CHINA MOBILE WEIGHS VODAFONE INVESTMENT China Mobile has examined buying between 5 percent and 20 percent of Britain's Vodafone in the hope of setting up a joint venture, City sources said.