BOOTS forecast costs of £42m (/61m) linked to its planned merger with Alliance Unichem.

Boots shareholders are being asked to chip in assets to the merger with Alliance. They are also likely to see the dividend cut by a third as they swap income for better growth prospects.

Shareholders will vote on the transaction at a meeting scheduled for 4 July.

Investors will receive a merger dividend of 10p per Boots share.

Chief executive Richard Baker is relying on the transaction to revive growth at the drugstore company, which faces competition from UK supermarket chains such as Te s c o .

Combining with Unichem will create a business with more than 2,500 outlets.

Boots expects to complete the merger on 31 July, the company reported last week.

Carphone Warehouse

Carphone Warehouse reported last week that sign-ups for its new broadband internet service are double its initial targets after the company offered cheaper prices than competitors to gain customers. The company signed up 340,000 users in two months for its 'Forever' product.

Second-half profit fell 17% because of costs related to acquisitions. It was also reported last week that Europe's largest mobile phone retailer may make an offer for the UK internet business of Time Warner AOL's UK unit.

Carphone Warehouse will be keeping a close eye on the AOL division, which has been valued at £1bn (/1.4bn). AOL is the third-largest internet service provider in the UK and other potential bidders may include Vodafone and O2.