SYDNEY (AFP) – Australia’s largest health insurer listed at a premium on the stock market Tuesday but drifted lower in the country’s most anticipated float this year and one of the nation’s biggest ever.
Shares in Medibank Private opened at A$2.22 in the second-biggest initial public offering in Australia behind telecommunications giant Telstra Corp, which was sold in three tranches from 1997. They lost steam and closed at A$2.14.
Forty per cent of the shares were sold to institutional investors at A$2.15 each, higher than the government’s initial A$1.55-2.00 range, while mum and dad investors were able to buy them at A$2.00.
Finance Minister Mathias Cormann said the government raised A$5.7 billion (US$4.9 billion) from selling off Medibank, Aus$1 billion more than initially forecast with interest strong.
It is a welcome boost to government coffers with the economy struggling to cope with a fading mining boom, prompting lawmakers to propose assets sales to strengthen the country’s budget position.
All the money will be tipped into Canberra’s so-called asset recycling fund, which helps Australia’s states and territories build new infrastructure such as roads and airports.