Govt names managers for Medibank IPO

Government names three investment banks to manage the multibillion dollar float, after hearing pitches from 11 banks.

The Australian government said it has appointed Deutsche Bank, Goldman Sachs and Macquarie as joint lead managers of the initial public offering of Medibank Private.

“Each of the joint lead managers brings a substantial mix of experience in Australian and global capital markets, privatisations, equity offers and the ability to project manage large capital market transactions,” a statement by Finance Minister Mathias Cormann said.

Reports have put the value of the float at up to $4 billion, making it one of the largest IPOs in recent years.

Subject to market conditions, Medibank Private will be sold in the 2014-15 financial year. The Commonwealth will not comment at present on the size, number of shares or potential price range of the Medibank IPO.

Managing state asset sales are not as financially rewarding for investment banks as IPOs of private companies but they carry status and help win work as companies feel the credibility of firms selected to manage a government sale is high.

There were eleven bids received from investment banks to be joint lead managers of the Medibank IPO. Other firms will also be appointed closer to the sale to supplement the selling syndicate, with a focus on retail selling roles, the government said.

“The government has reserved the right to make additional joint lead manager appointments if required,” Mr Cormann said. Previously, the Commonwealth had said up to four joint lead managers may be appointed for the Medibank IPO.

The government also decided to extend the contracts for the Medibank Private scoping study advisers through the sale phase.

These advisers are Lazard as business adviser, Herbert Smith Freehills as legal adviser, Ernst and Young as accounting adviser, Newgate Communications as communications adviser and the Australian Government Solicitor as process and probity adviser.

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