Preliminary roadshow for Medibank IPO

STATE-owned Medibank Private will kick off the first round of a roadshow on July 8 for its planned initial public offering, estimated to be about $4 billion, reporting by Data Room has discovered.

Joint lead managers Deutsche, Goldman Sachs and Macquarie will be booking appointments with institutional investors around the world for Medibank chief executive George Savvides and chief financial officer Paul Koppelman on Wednesday.

Mr Savvides and Mr Koppelman will first meet institutional investors in Melbourne and Sydney next week. The three-week roadshow will then move to Asia, Europe and finally North America.

It is believed this will be only a preliminary and informal meeting with investors for the IPO, aiming at promoting industry understanding of Australia’s private health insurance model. There will be no deal committed.

It is likely that Medibank, owned by the Australian government, will do more than one round of roadshows, as it usually takes a much longer process for the government to facilitate asset sales than private companies. Investors may find it hard to draw up an international parallel for Medibank, as private health insurance models vary across different jurisdictions. They will probably look to existing healthcare companies such as leading private hospital operators Ramsay Healthcare and Healthscope, which just lodged the prospectus for its $2.6bn IPO earlier this week.

The government will also be more traditional in engaging mostly big institutional investors including pension funds. Unlike Healthscope, Medibank will not be seeking any cornerstone investors ahead of launching the offering.

With Australia’s IPO market running at multi-year highs, Medibank has been expected to fast-track its sale process. However, the government is still sticking to its timeline of completing the IPO in the 2014-15 financial year, subject to market conditions.

The government has not made any comment on the size, number of shares or potential price range of the Medibank IPO, but industry estimates have put the size at about $4bn, making it one of the largest IPOs in recent years.