Medibank Private says policyholders well placed to buy into float

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Medibank Private policyholders are well placed to buy into the health insurer’s $4 billion-plus float, according to a survey that has found that the fund’s customers already own $50 billion worth of listed company stocks and have $94 billion in savings.

Roy Morgan Research said that just over a quarter (26.3 per cent) of Medibank’s 2.3 million adult customers already own shares in other listed companies.

Roy Morgan Research says that Medibank's adult customers have $94 billion in their bank accounts. Roy Morgan Research says that Medibank’s adult customers have $94 billion in their bank accounts. Photo: Louie Douvis

The total value of that portfolio is about $50 billion, interviews with 3,202 Medibank customers in the six months ended Auguast showed.

In addition, Medibank’s adult customers have $94 billion in their bank accounts, the research house said.

The Coalition announced this week that the insurer’s million customers will get priority in the distribution of shares in the offer, so long as they pre-register to reserve a prospectus.

The move was described by Medibank managing director George Savvides as recognising “loyalty”, but for those arguing that policyholders should have received free shares in the offer it did not go far enough. However the government has consistently argued that Medibank is structured as a government-owned business, as opposed to a mutual organisation with members.

Roy Morgan’s industry communications director Norman Morris said the group showed “great potential” to buy into the float, which investment banks have estimated could reap between $4.1 billion and $5.7 billion for the government. The initial public offering could be the largest since the privatisaiton of rail freight business QR National, which listed in 2010 with a market value of $4.6 billion.

“They have currently shown a distinct predisposition towards share ownership and have the funds available if they find the offer attractive,” Mr Morris said in a statement.

“There is obviously some time to go before the anticipated listing in December and prior to that date, there will no doubt be considerable discussion and analysis of the float’s prospects. Although the outlook is positive at the present time, this could change quickly, particularly if volatility in the ASX increases to create more investor uncertainty or if the government changes any of the conditions relating to the float.”

Mr Savvides has said he does not expect market volatility to derail the privatisation of Medibank, because of the corporation controls a significant stake of an industry with attractive growth prospects.