DataRoom AM: Medibank’s road ahead

Proceeds from floating Medibank Private look set to be funnelled into infrastructure, while Mantra’s IPO aspirations are pulled.

The Abbott government has committed to a float of Medibank Private, with a $5 billion listing a rare ray of light for a shaky IPO market.

Elsewhere, Woodside Petroleum prepares to finalise its entry into a major offshore gas field, Mantra Group and MySale abort planned ASX listings, Myer dismisses reports a revised David Jones offer is in the works and Harry Triguboff entertains offers from China for his property development firm Meriton Group.

The federal government has pulled the trigger on an IPO of the nation’s largest health insurer Medibank Private. The decision was likely assured prior to the receipt of a scoping study, but that report has proven the catalyst for pressing ahead with a $5bn float in the 2014-15 financial year. The exact timing and structure is unclear, but the fourth quarter of 2014 or first quarter of 2015 would appear the smartest bets.

Proceeds from the deal will be ploughed into roads and other infrastructure, undoubtedly pleasing infrastructure investors and the construction industry but much to the chagrin of the healthcare sector.

Despite the Medibank Private news having investment bankers salivating, there’s every reason to believe the IPO market is stressed. The latest example of this is the pulled float of Mantra Group, which had hoped to raise $400 million. According to The Australian Financial Review, Mantra’s majority owners, UBS and CVC Asia Pacific, have decided to pull the pin after initially looking to scale back the float to $240m.

It follows this month’s scrapping of a $250m listing of childcare operator Sterling Education and several weak debuts on the ASX in December. Also canning IPO plans yesterday was online sales group MySale, the AFR reported. The owner of OzSale was due to list in May with a valuation of $500m.

Fifteen months after first announcing plans to enter the Leviathan gas project in Israel, Woodside Petroleum is ready to sign on the dotted line. According to Israeli news service Globes, the Australian energy giant is slated to attend a signing ceremony in Jerusalem today to shore up a 25 per cent interest, worth up to $2.85bn.

Closer to home, rich lister Harry Triguboff has caught the eye of Chinese investors, with unsolicited bids arriving for his property developer Meriton Group. At this stage, Triguboff -- who will visit China next week -- is hinting he will reject the offers, but his comments suggest a sale isn’t completely out of the question.

In retail, Myer boss Bernie Brookes has refuted claims the department store operator is planning to sweeten its offer for rival David Jones. Speculation has swirled that a cash-and-scrip deal could soon replace the original scrip-only proposal, but Brookes confirmed that negotiations have yet to even start.

Elsewhere, Westfield Group has entered into $22bn of funding commitments, which are required for a bold restructure of the business, while Yancoal Australia has agreed a $300m long-term debt facility with major shareholder Yanzhou Coal just 24 hours after Yanzhou dropped its takeover proposal for the group.

Finally, IAG has received the green light from regulators for its purchase of the insurance underwriting business of Wesfarmers. The $1.8bn deal was first announced in December.