* Medibank IPO could fetch A$4 bln, among biggest of the
* Australian government says sale would help competition
* Government wants to use proceeds to fund infrastructure
(Adds Fin Min quotes, detail on Australian IPOs, plans for
SYDNEY, March 26 The Australian government said
on Wednesday it will sell state-owned health insurer Medibank
Private in a public float, which local media have tipped could
fetch about A$4 billion ($3.76 billion), but added the structure
of the sale was yet to be decided.
The decision follows a lengthy study which found that taking
the company public would improve competition in the health
insurance industry, Finance Minister Mathias Cormann said.
Australia's federal and state governments are pursuing an
aggressive strategy of selling off state-owned assets to pay
down debt and fund investment in roads and other infrastructure
"Our stated intention is to recycle the capital that is
thrown up from the sale of Medibank to invest in productivity
and infrastructure," Cormann told reporters.
The announcement also comes as private equity companies look
to equity markets as an increasingly attractive exit
Medibank would rank among the biggest Australian floats of
the year, alongside another health-related company, hospital
operator Healthscope, which owners TPG Capital and The Carlyle
Group are contemplating floating for an estimated A$5
The government plans to sell Medibank in the 2014/15
financial year but "the precise time is yet to be decided",
Cormann said, adding the sale will still ultimately depend on
market conditions. The structure of the sale also was yet to be
decided, he said.
"We would expect that there would be wide ranging interest
in the opportunity to invest in Medibank Private as a
business... including (from) retail and institutional
investors," he said.
Some doctor groups have warned that taking Medibank public
could drive up insurance premiums but the scoping study found it
would have the opposite effect, Cormann said.
"The advice that we've got... is this will strengthen
competition in the health insurance market," he said, adding
existing legislation puts an ownership limit of 15 percent for
any individual organisation for a period of five years.
"We will continue to take financial advice and continue to
monitor market conditions closely," he said. "Our objective is
to maximise proceeds from the sale."
($1 = 1.0933 Australian Dollars)
(Reporting by Byron Kaye; Editing by Anupama Dwivedi)