Medibank to be sold off in public offering in July
THE taxpayer-owned health insurance house Medibank Private will be sold to the private sector, through an initial public offering, as early as July.
Finance Minister Mathias Cormann announced today in Canberra the decision to proceed with an IPO for the sale, after considering a scoping study of the proposal.
Established in 1976, the company includes off-shoot provider AHM and provides health insurance cover to an estimated 3.8 million people.
Senator Cormann said the deal would also likely include conditions to maintain the "service and quality levels" for customers, "including in regional and rural Australia".
Senator Cormann said an IPO of the insurance company presented the "best option" for the government's intention to sell the public asset.
But while market analysts and pundits have previously valued the corporation at somewhere about $4 billion, Senator Cormann refused to put a specific figure to it.
The proceeds from the sale would likely go towards infrastructure projects, but Senator Cormann could not confirm how the revenue estimates from the sale would appear in the May budget.
Senator Cormann said the deal would not need legislative approval, instead being allowed to proceed under sale legislation passed in 2006.
However, those laws would prevent any single investor owning more than a 15% stake in the corporation until at least five years after a deal was struck to help ensure some stability after the sale.
While similar sales in the past have included an offering to existing customers, Senator Cormann said he would not comment on the likely structure of the privatisation until a prospectus was issued later this year.
He said he hoped Medibank would be sold in the 2014-15 financial year, and the scoping study had not found any evidence insurance premiums would increase as a result.
But despite Senator Cormann saying the proposal had gone through a rigorous "regulatory impact statement" process, the sale, as an election commitment, was exempt from considering any other course of action for Medibank.