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Medibank retail offering nears its end

13 November 2014 - 1:49pm

You may have already heard about the Medibank Private sale: a stock market flotation that will put Australia's largest health insurance provider up for sale before the end of November.

The government says the privatisation of the company will increase competition in the health insurance market, and ensure they are not both regulator and insurer at the same time.

The flotation on the Australian Securities Exchange (ASX) is expected to raise between $4.3 billion and $5.5 billion for the government - although interest was significantly higher, as brokers placed total bids of almost $12 billion a couple of weeks ago.

Upcoming IPO

Medibank will trade at between $1.55 and $2 per share in the retail offering, which will come to a close at the end of this week. Those who registered an initial interest have been encourage to apply for shares before the general public offering closes at 11.59pm (Australian eastern daylight time) on Friday 14 November 2014.

Pre-registrants who apply before that date and time will be eligible for a 15 per cent extra allocation of shares over general public offering applicants who did not pre-register. Therefore, Medibank have motivated pre-registrants to act before the end of the week if they wish to secure shares in the insurance provider.

The company will then begin trading on the ASX on November 25, when, experts say, the price cap of $2 per share could be significantly higher after the initial public offering (IPO).

Investment analyst Mike King wrote on The Motley Fool: "The IPO share price is likely to be set above $2.00 for institutional investors. Fairfax media reports that a pre-listing shadow market operated by IG Markets has the share price currently at $2.15.

"The federal government may well set the offer price slightly lower than that, to keep investors interested, say $2.05 to $2.10. Retail investors will of course only pay the maximum price of $2.00, guaranteed under the prospectus."

Medibank members

Medibank policy holders who have registered for shares in the company will also need to act quickly to secure a 30 per cent extra allocation of shares outlined in the Medibank prospectus. 

Once the dust settles on the flotation, members of Australia's leading health insurance provider can expect little change, Medibank said.

However, with competition in the health insurance market expected to increase from the sale, consumers are likely to find more value than ever when considering changing their provider.

If you would like to compare health insurance plans and prices, your insurance broker will be able to arrange this for you. Contact HICA and discuss health insurance options that are right for you, your family or your company.