SYDNEY: Australia's largest health insurer listed at a solid premium on the stock market Tuesday in the country's most anticipated float this year and one of the nation's biggest ever.
Shares in Medibank Private opened at Aus$2.22 in the second-biggest initial public offering in Australia behind telecommunications giant Telstra Corp, which was sold in three tranches from 1997.
Forty percent of the shares were sold to institutional investors at Aus$2.15 each, higher than the government's initial Aus$1.55-2.00 range, while mum and dad investors were able to buy them at Aus$2.00.
Finance Minister Mathias Cormann said the government raised Aus$5.7 billion (US$4.9 billion) from selling off Medibank, Aus$1 billion more than initially forecast with interest strong.
All the money will be tipped into the government's so-called asset recycling fund, which helps Australia's states and territories build new infrastructure such as roads and airports.
Cormann said the privatisation was a "win-win" for Medibank policyholders and taxpayers.
"It's a win for Medibank Private policy holders because we believe Medibank Private in private hands will perform even better than under government ownership because they will have more flexibility to pursue growth opportunities into the future," he said.
"It's a win for all Australians with private health insurance and indeed it's a win for all Australians seeking affordable access to high quality health care ... and of course it's a win for taxpayers."
Medibank, which provides cover to 3.8 million people, was established in 1976 by the government to compete in the private insurance market.
It became a profit-orientated government business enterprise in 2009.
The company's managing director George Savvides said the interest from investors had been overwhelming.
"I hope Medibank will enjoy a successful future in the spirit of other government privatisations such as Commonwealth Bank and CSL," he said after ringing the Australian Stock Exchange bell together with Cormann to get trading underway.
CMC Markets trader Will Leys said the listing had gone well for all concerned.
"There has been quite a build-up and excitement amongst the general public," he said in a note.
"While it's no Alibaba, the sheer size of the listing, combined with the fact that has been part of Australian landscape for so long, justifies the attention it's receiving.
"So far, a good result for those involved."
Chinese online giant Alibaba became the largest initial public offering in history this year when it listed on Wall Street, raising more than US$25 billion.
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