Media Release

Medibank Private Broker Firm Offer exceeds expectations - $12 billion in bids received – $1.5 billion allocated

MC 111/14

Senator the Hon. Mathias Cormann
Minister for Finance

30 October 2014

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

The Medibank Private Share Offer has reached another milestone with the successful completion of the Broker Firm Offer, which saw the submission of $11.987 billion in binding bids by brokers for allocations of Medibank Private shares.

The Government is pleased to announce that eligible Australian and New Zealand brokers who bid for a firm allocation of shares on behalf of their retail clients have been allocated $1.5 billion of Medibank Private shares.

Consistent with the advice in the Medibank Private Share Offer prospectus, the shares allocated to the Broker Firm Offer may be subject to a further clawback of up to 20 per cent, following completion of the Institutional Offer.

Broker Firm allocations have already been significantly scaled back due to the exceptionally strong level of demand for Medibank Private shares during this phase of the Offer.

The Government considers that this reduction in Broker Firm allocations is appropriate and necessary to ensure equitable access by Medibank Private policyholders and the general public to the Share Offer.

Total demand for Broker Firm stock equated to more than double the total value of shares on Offer, based on the Retail Price Cap of $2.00 per share.1

All compliant Brokers that applied for shares through the Broker Firm Offer have been allocated shares. Those Brokers are now responsible for allocating those shares to their clients.

Australian broker clients can of course still apply through the General Public Offer or, if eligible, the Policyholder Offer or Employee Offer, which remain open until 14 November 2014.

Retail investors can apply and pay online at medibankprivateshareoffer.com.au or call 1800 998 778 for a prospectus.

As indicated, to ensure the Commonwealth retains allocation flexibility to produce an appropriately balanced share register with particular consideration to meeting Policyholder Offer and General Public Offer demand, a clawback of up to 20 per cent of Broker Firm allocations can be undertaken following the completion of the bookbuild.

The Broker Firm Offer forms part of the Retail Offer, together with the General Public Offer, the Policyholder Offer and the Employee Offer.

In addition to the Retail Offer, the Government is also offering Medibank Private shares to domestic and international institutions through an Institutional Offer.

No decisions will be made on the overall split of share allocations between the Retail and Institutional Offers, nor between domestic and international institutions, until the Share Offer has been completed.

The final price for the Medibank Private shares and the number of shares investors will receive based on the allocation criteria is expected to be announced by Tuesday, 25 November 2014, after the Retail and Institutional Offers have closed.

Medibank Private is a commercial business operating in a well-functioning and competitive private health insurance market with 34 competing funds.

As such there is no compelling policy reason for the Government to continue to own Medibank Private.

The sale of Medibank Private will provide the company with full commercial independence and access to capital markets.

The sale will also remove the current conflict where the Government is both the regulator of the private health insurance market and owner of the largest market participant.

Proceeds from the sale of Medibank Private will be re-invested into productivity enhancing infrastructure through the Government's Asset Recycling Initiative.

[ENDS]

Media Contact(s): 

Karen Wu – 0428 350 139

Legal Notices

The Offer by the Commonwealth of Australia is only made through the prospectus which you should consider in deciding whether to apply for shares. To apply, you need to complete the application form in or with the prospectus. The prospectus may be obtained by visiting medibankprivateshareoffer.com.au or calling 1800 998 778. This document does not constitute an offer to sell, or a solicitation of an offer to buy securities in the United States or any other jurisdiction. The shares referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933 (the "U.S. Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States absent registration under the U.S. Securities Act or an exemption from registration requirements. Unless the context requires otherwise, terms adopt the meaning given in the prospectus.

 

[1] The Retail Price will only apply to the first $250,000 worth of shares (rounded down to the nearest share) allocated to applicants under the Retail Offer. If applicants are allocated shares above $250,000, they will pay the Final Price for those shares.