The Australian Government has confirmed that its private healthcare provider, Medibank Private, will be floated on the stock market next financial year.
At a press conference this afternoon Finance Minister Matthias Cormann said that following a scoping study into the business, which some have estimated is worth $4 billion, the sale would go ahead.
Clayton Utz lawyer David Fagan, corporate advisor Linda Nicholls and CSL and Transurban director Christine O’Reilly will join the board on March 31 to prepare for the float.
Cormann said the Government would not be putting a value on the business. “It wouldn’t be appropriate for me to speculate on what sale price may or may not be achieved,” he said.
“I’m not going to put a figure on it.
“The independently-prepared scoping study reaffirmed our long-held view that there is no compelling reason for the Government to own Medibank Private,” he said. “We are able to proceed the initial public offering in 2014-15.”
While the government has yet to finalise the terms, timeline and structure of the IPO, he said no single entity will be able to own more than 15% of the company. There was no comment made on which investment bank would underwrite the sale.
“We’ll make a judgement and when we’re satisfied that the most appropriate window for sale is present… then we’ll move ahead.”
Cormann said Medibank Private was “a commercial business operating in a well-functioning, well-regulated competitive private health insurance market with 34 competing funds,” and that there was no evidence premiums would increase as a result of the sale.
“We don’t have a policy to sell any other assets. If that changes at any time, we will make the relevant announcements,” he said.
National Seniors chief executive Michael O’Neill says he sees no down side to the sale.
“Medibank Private competes in the private sector and it makes no sense for them to be owned by government,” he says.
“Government needs to focus on the sector in total being competitive and efficient and ensure that the annual premium increases are appropriate.”