April 17 (Bloomberg) -- Australia hired Macquarie Group Ltd., Deutsche Bank AG and Goldman Sachs Group Inc. to manage the initial public offering of Medibank Private Ltd., the country’s largest health insurer.
The banks were appointed joint lead managers after eleven bids were received, Finance Minister Mathias Cormann said today in a statement. The government may appoint more lead managers if required and will name other firms closer to the IPO to focus on selling shares to retail investors.
The government plans to sell Medibank before June 2015, Cormann said last month, as the government seeks to rein in a budget deficit. Nomura Holdings Inc.’s Sydney-based analyst Toby Langley values the insurer at about A$4 billion ($3.8 billion) based on peer-group analysis, he said March 26 by phone.
Australia’s government faces a budget deficit forecast to balloon to A$47 billion in the year to June 30 and Treasurer Joe Hockey has pledged spending cuts in an economy weighed down by an elevated currency and slowing mining investment. He is also encouraging state governments to sell assets to fund new infrastructure projects.
The government today extended the contracts of advisers who conducted the scoping study on Medibank’s IPO, including Lazard Ltd., Herbert Smith Freehills LLP and Ernst & Young LLP, it said in the statement.
Australia provides its citizens with free or subsidized health care at clinics and hospitals through Medicare. It also encourages people through tax benefits to take out private health insurance. About 47 percent of Australians are covered by private insurers for hospital treatment while 55 percent are covered for other services such as dental and optical, according to a statement in June from the government’s Private Health Insurance Administration Council.
Medibank’s operating profit before tax rose 14.2 percent in the 12 months ended June 30, 2013 to A$185 million, driven by a 9.4 percent gain in revenue, the insurer said Oct. 8. It had over 3.8 million members and a 29 percent market share, it said at the time.
To contact the editors responsible for this story: Philip Lagerkranser at email@example.com