Our prediction is correct. .Retail will be allocated around $3 billion of Medibank.. Fundies will be squeezed.. The only news left we need to hear is the strong interest from overseas instos which will squeeze domestic instos even more..
Government seeks $3b from Medibank retail investors
The federal government has set aside more than $3 billion worth of Medibank Private shares for retail investors, which means mum and dad shareholders will end up owning about 60 per cent of the company.
Attention turned to Medibank’s retail allocation on Thursday, when the government handed retail brokers shares worth $1.5 billion, after receiving bids for almost $12 billion.
The broker firm offer will be followed by the general public and Medibank policyholder offers, which are expected to be worth up to another $2 billion.
It’s understood the government is seeking to sell shares worth 55 per cent to 60 per cent of the private health insurer to retail investors.
If successful, it would be the largest retail offer since Telstra’s three floats, both in size and as a portion of the overall float.
Retail investors took 60 per cent of Telstra’s first and third initial public offerings and 67 per cent of Telstra two.
More recently, retail investors were allocated 34 per cent of Aurizon’s float in 2010, and took 42 per cent of Healthscope’s re-listing in July.
It means institutions will be left to take up the remaining 40 per cent to 45 per cent stake, worth $2 billion to $2.5 billion depending on the final price. Pricing power, though, rests with the institutions. While it looks like the government and its advisers will squeeze fund managers by restricting supply in the institutional offer, fundies will determine the price for all investors at a bookbuild due to close at noon on November 20.
Medibank is seeking to raise $4.3 billion to $5.5 billion at $1.55 to $2 a share. The offer is priced at 16.5-times to 21.3-times forecast 2015 financial year profit.
