- ALICE MORREY BAILEY of Salt Lake City has been awarded first prize in the poetry category of the Arizona Author's Association annual competition.

More than 700 writers from 14 states entered the several categories of the competition.- A.S. (ANTONIA) BYATT, a critic and novelist, this week won the Booker Prize, Britain's most prestigious literary award, for her tale of two young scholars investigating the lives of a pair of imaginary Victorian poets.

The five judges deliberated two hours before awarding the $39,000 prize to Byatt for "Possession," one of six finalists in the 21-year-old competition.

Last year's Booker winner was Kazuo Ishiguro for his novel, "The Remains of the Day." - Associated Press

- THE WALT DISNEY CO., which announced its entry into children's book publishing this summer, now says it will expand into adult fiction and non-fiction books.

The new imprint will bring out its first titles in the fall of 1991 and will publish about 50 titles in the first year of operation, Disney said.

California-based Disney, which has built its fortune on theme parks and movies, said in June it would form a children's book publishing company, in part to capitalize on the strength of Disney characters. - Reuter News Service