Medibank Private float given the greenlight

The Australian Government has flicked the switch on the sale of Australia’s largest health insurer, Medibank, with the announcement of an initial public offering of shares (IPO) by December.

The Australian Government has flicked the switch on the sale of Australia’s largest health insurer, Medibank, with the announcement of an initial public offering of shares (IPO) by December.

The Medibank IPO will come after share sales by Australian companies this year reached about $9.7 billion, the highest since 2005, according to data compiled by Bloomberg.

The Commonwealth Finance Minister Mathias Cormann told ABC Radio’s AM program, that the timetable from here is “that by the end of September all Australians will be able to pre-register their interest in Medibank Private shares.”

He added, “By the end of October, people will be able to receive the Medibank Private share offer prospectus. That prospectus will include all of the specific detail about the structure of the sale, including the issues relating to Medibank customers.”

Sam Henderson, CEO of private wealth manager, Henderson Maxwell, said the government will want a good price for Medibank, as it’s one of the best assets it’s got.

“It’s also a perfect time to be selling as Australian shares are at seven year highs, and US markets are at record levels, so they’ve timed this float beautifully,” said Henderson.

The managing director of financial services firm Your Corner, Matt Brown, believes there is strong appetite among retail investors for healthcare stocks, as demonstrated by the positive float of Healthscope in July.

“This augers well for Medibank, as there is an increasing demand for healthcare services on the back of our ageing population and the government’s desire to look at ways to trim the healthcare budget,” Brown said.

“Given that there are not many listed healthcare companies on the ASX, I expect this to be a highly sought after float, while buying shares in the likes of Medibank Private delivers investors some diversification away from the banks and the mining stocks.”

InvestSMART will be issuing an expression of interest for stock, with priority given to members who use our Portfolio Manager for their investments.

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