* Healthscope shares climb 2.4 pct in early trade
* Shares listed near top of target price range
* Medibank expected to raise A$4 billion sometime in FY15
* Healthscope to use A$2.4 bln to retire debt, eyes SE Asian market - prospectus (Recasts with analyst's comments, details about healthcare market, updates shares)
By Swati Pandey
SYDNEY, July 28 Hospital operator Healthscope Ltd's positive debut on Monday set the stage for the privatisation of state-owned Medibank Private, as investors ramp up exposure to Australia's ageing population and subsidised health sector.
Healthscope raised A$2.26 billion ($2.12 billion) in Australia's biggest initial public offering in four years, pricing its shares near the top of its target range at A$2.10 each. At 0350 GMT they had climbed 2.4 percent to A$2.15 compared with a 0.15 percent drop in the benchmark S&P/ASX200 index.
"I think the valuation was pretty full when they took it to market so a lot of good news has been in the price," said Peter Esho, managing partner at wealth management firm 100 Door.
The reception for Healthscope reinforces the attraction of health-related listings in a country where services and private insurance are government-subsidised and demand is being fuelled by a rapidly ageing population.
The number of Australians with private health insurance - the biggest driver of private hospital revenue - has risen from 9.8 million to 11 million since 2009, or to just under half the population. The government pays a 30 percent rebate on private health insurance premiums.
Stocks in Australian private health operators have surged so far this year, with market leader Ramsay Health Care Ltd up more than 8 percent and Sonic Healthcare Ltd gaining over 9 percent, compared to a 4 percent rise in the broader index.
Analysts said Healthscope's debut augured well for the federal government's plans to sell insurer Medibank Private through a A$4 billion IPO some time in the 2014/15 financial year.
"I think the appetite's there. I think it's quite a positive IPO market ... and (shows) that good quality businesses will be sought after," Esho said.
Healthscope's offer was at a hefty multiple of 23 times annual earnings, steeper than Sonic's forward price-earnings ratio of 16.7 times and 13.3 times for Primary Health Care . Ramsay has a forward price-earnings ratio of 24, according to Thomson Reuters data.
Healthscope declined to disclose the names of its cornerstone investors but Australian media said they included Malaysia's Employee Provident Fund, Blackrock Inc and AMP Capital.
BIGGEST IN FOUR YEARS
Healthscope is Australia's second-largest hospital operator with 44 private hospitals as well as pathology centres in Australia, New Zealand and Asia.
U.S. buyout firms TPG Capital Management Ltd and Carlyle Group LP took the company private for A$1.99 billion in 2010, and are now listing it with a market capitalisation of A$3.6 billion.
Healthscope's offer was the largest in Australia since rail freight company QR National Ltd, since renamed Aurizon Holdings Ltd, raised $4.4 billion in November 2010.
Australia had a record first half of new listings in the six months to June 30, with $4.1 billion raised or five times the amount sold in the same time last year.
But vendors of assets in the IPO pipeline are watching nervously as several listings have been cancelled or delayed in recent months due to investor concerns that some offerings are starting to look over-priced.
Healthscope's float comes weeks after 3P Learning Ltd , the home of children's online education game "Matheletics", disappointed investors by falling as much 14 percent on debut.
In its prospectus, Healthscope said it would use A$2.4 billion from sale proceeds to cut debt. It hopes the listing will give it added financial flexibility to pursue further growth opportunities.
It has nine brownfield developments under construction or planned and is also eyeing partnerships that will allow it to enter the Southeast Asian private hospital market. ($1 = 1.0648 Australian Dollars) (Additional reporting by Thuy Ong in Sydney; Editing by Stephen Coates)