Minister sets out scoping study to sell Medibank
Tender documents show the scoping study, which will pave the way to a sale, must "contribute to an efficient, competitive and viable private health insurance industry" while maintaining service and quality levels in country Australia.
It must also ensure Medibank's 4800-plus employees are treated in a fair manner, reduce post-sale risk and liabilities to the federal government, and maximise net proceeds, according to the Department of Finance documents.
A trade sale would require the Medibank Private Sale Act to be amended to remove a 15 per cent ownership limit.
If the government chooses to list Medibank on the sharemarket, the business adviser is asked to review advice from the selling syndicate regarding offers to Medibank's 3.8 million members.
A sale of Medibank has been considered controversial given its capital base has been built almost entirely on taxpayer contributions.
Medibank has a 29 per cent market share in the health insurance insurance sector, with more than 120 branches.
Almost a third - or more than 1500 - of its employees are doctors, nurses, counsellor, dentists and other health providers.
The Australian Medical Association has warned a sale could increase health insurance premiums by decreasing competition. But Health Minister Peter Dutton recently said it would put "some downward pressure on premiums".
The scoping study, which will report to the government before the 2014 budget, will provide recommendations on sale method, timing, regulatory issues, readiness and estimated proceeds.
The successful bidder will not be able to participate in any initial public offering. The department stressed a sale was not assured, and there could be a gap of at least 12 months between the scoping study and a sale - meaning it would proceed in 2015.
Mark Fitzgibbon, the chief executive of the country's only listed health insurer, NIB, has said Medibank Private could emerge as a takeover target if privatised.
Mr Fitzgibbon said an initial public offering was likely rather than a sale to another business, because previous demutualisation of insurers - including NIB - had given members the cash.
Frequently Asked Questions about this Article…
The federal government is considering selling Medibank Private and has called for tenders to advise on key aspects of the sale, including whether to proceed with a trade sale or a sharemarket float.
The federal government is considering selling Medibank Private and has called for tenders to advise on key aspects of the sale. This includes exploring a trade sale or a sharemarket float, and potentially removing the ownership cap if a trade sale proceeds.
The sale of Medibank Private is controversial because its capital base has been built almost entirely on taxpayer contributions, raising concerns about the implications of privatization.
The scoping study for the sale aims to ensure that the sale contributes to an efficient, competitive, and viable private health insurance industry while maintaining service and quality levels, especially in rural areas.
The Australian Medical Association has warned that selling Medibank Private could increase health insurance premiums by decreasing competition. However, Health Minister Peter Dutton has suggested it might put downward pressure on premiums.
The government has emphasized that Medibank's 4,800-plus employees should be treated fairly in the event of a sale. This includes ensuring that their rights and conditions are respected throughout the process.
The scoping study will provide recommendations on the sale method, timing, regulatory issues, readiness, and estimated proceeds. It aims to ensure an efficient, competitive, and viable private health insurance industry while maintaining service and quality levels.
There are differing opinions on this. The Australian Medical Association has warned that a sale could increase premiums by reducing competition, while Health Minister Peter Dutton has suggested it might put downward pressure on premiums.
The scoping study must ensure that Medibank's 4,800-plus employees are treated fairly in the event of a sale, addressing concerns about their future employment conditions.
The scoping study will report to the government before the 2014 budget, and there could be a gap of at least 12 months between the study and the sale, meaning it might proceed in 2015.
If the government opts for a trade sale, the Medibank Private Sale Act would need to be amended to remove the 15% ownership limit, allowing for greater ownership flexibility.
The government is considering either a trade sale or listing Medibank on the sharemarket. The decision will depend on the recommendations from the scoping study regarding the best method, timing, and regulatory issues.
The scoping study will report to the government before the 2014 budget, and there could be a gap of at least 12 months between the study and a sale, meaning it could proceed in 2015.
Yes, Mark Fitzgibbon, CEO of NIB, has suggested that Medibank Private could become a takeover target if it is privatised, especially if it is listed on the sharemarket.
Yes, Mark Fitzgibbon, CEO of NIB, has suggested that Medibank Private could emerge as a takeover target if it is privatized, especially if an initial public offering is pursued.
Currently, there is a 15% ownership limit under the Medibank Private Sale Act. If the government opts for a trade sale, this cap would need to be removed to facilitate the sale.
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