anyones thoughts nib , page-5

http://www.news.com.au/business/story/0,23636,22709672-462,00.html
Healthy premiums as NIB debuts on ASXBy Teresa Ooi
November 06, 2007 03:00am
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NIB Holdings became the first private health insurer to list on the Australian Securities Exchange yesterday, debuting at $1.18 a share - a strong 40 per cent premium.

NIB shares opened at $1.14 at midday before peaking at $1.19 on volume of about 22.7 million.

The share price rose 33c to close at $1.18, valuing the Newcastle-based company at $610 million.

"We are very pleased," NIB chief executive Mark Fitzgibbon said.

"It's been quite a journey.

"Being the first health fund to list on the stock exchange has some level of satisfaction. But it is the end of the beginning. The true test is to continue to grow the company and trade above enterprise value."

He said NIB aimed at organic growth. Last year, it grew at 8.8 per cent when the industry average was only 4.2 per cent.

"The listing also gives us the opportunity to play a more leading role in the industry's mergers and acquisitions which everyone says is inevitable," Mr Fitzgibbon said.

"It would be presumptuous of me to specify which health fund is a takeover target. There are a total of 37 health funds in the country."

NIB has about 7 per cent share of the private health insurance sector, which is dominated by the government-owned Medibank and MBF, which together account for 46 per cent of the market.

Both insurers are planning to list on the stock market next year.

BUPA Australia, the country's third-biggest health insurer, recently made a $2 billion takeover offer for MBF, which has stated that it preferred to demutualise and list on the stock exchange.

Mr Fitzgibbon acknowledged that while NIB could not dominate the entire health insurance market, it would become a very big player in the under-40s sector.

"We are very focused on that under-40s segment, where we have close to 9 per cent of the market," he said.

He added that NIB was looking to develop its brand nationally and make bigger inroads in the Victorian and Queensland markets.

NIB's chairman Keith Lynch said the private health insurance industry was ripe for consolidation, which would make a small player like NIB a vulnerable takeover target by more aggressive competitors.

NIB's decision to list on the ASX would give it access to capital markets, which would facilitate growth through mergers and acquisitions.

For 2008, NIB has forecast premium revenue of $750.7 million and normalised net profit of $32.1 million.

Mr Fitzgibbon said NIB's demutualised status puts a new perspective on the industry's structure.

NIB will now have to pay income tax. Under the mutual structure, NIB was exempt from income tax because it was a registered non-profit private health insurer.

NIB's 328,000 policyholders each received between 100 and 6000 shares, with an average of 1450.

They were offered the chance to sell their shares at a pre-listing price of 85c a share, but only 30,000 took up the offer.

The majority of its policyholders decided to remain as shareholders.