Medibank Private IPO: a model for future privatisations

The government has achieved its aim of maximizing the sale price of Medibank Private. That it’s managed to do this while looking like its done shareholders a service means you can expect more government floats sold along similar lines soon.

With the Medibank Private IPO priced at $2.15, the government has exceeded the indicative range of $1.55 to $2.00 disclosed in the prospectus. However, in a nod to voters, it has sensibly ensured that retail punters only pay $2.00, at least locking in a minimum 7% gain for them in the short-term. The share price could list higher than $2.30 when trading begins today at 12pm.

In summary, the government has achieved its aim of maximizing the sale price of the business. That it’s managed to do this while looking like its done shareholders a service means you can expect more government floats sold along similar lines soon.

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