Medibank has been put up for sale by the Australian government.
Medibank is Australia's largest private health insurer by Premium Revenue, however it has the second highest Management Expense Ratio (MER) just behind HBF (source: Morningstar). The prospectus has not been published however in my opinion some of the salient points are:
- Potentially massive opportunity for cost-cutting in the hands of private operators
- Private health insurance is a growing and stable market
- Potential for the IPO pricing to be very reasonable
We need to wait and see what is contained in the prospectus before worrying about things too much. The main purpose of this post is to flag with interested eligible readers to pre-register their interest at the following address:
Pre-registration closes 15 October.
I will write some follow-up analysis when the prospectus is released.
As an aside...
Perhaps this is wishful thinking, but it could be a superb catalyst to help draw retail investors back to the share market. Previous floats such as Telstra and Commonwealth Bank created an army of share investors and it was a great shame to see so many people burned through the GFC process. The government gives out hand outs to entice people into the property market, so why not do the same for share investors. Handing Medibank out at a big fat discount would do the job!
Disclosure: no position in Medibank (but hold a policy)
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