Nib May Become First Local Private-health Insurer To Float

The Age

Saturday June 9, 2007

Danny John, Sydney

NIB will become the first Australian private-health insurance group to list on the stock exchange if its policyholders vote to drop the group's mutual status and float it in a listing worth about $500 million.

The private-health insurer is hoping to beat its bigger rivals - MBF and the market's largest player, government-owned Medibank Private - to float as the private-health sector prepares for what is likely to be a wave of mergers and acquisitions in the next two years.

NIB's 320,000 policyholders stand to get up to 6000 shares each if the move goes ahead.

Holders of family insurance policies who have been with NIB for up to 30 years stand to be the biggest beneficiaries as they will get the maximum allocation under the plans to issue equity.

The Newcastle-based insurer will ask policyholders to vote on the demutualisation on July 19, which, if approved, will clear the way for the newly incorporated company to join the ASX in October or November.

NIB is the country's sixth-biggest health insurer, and will use the listing to expand either through a merger or by acquiring other operators.

No price has been fixed for the shares, as that will only be decided if the demutalisation - which requires the support of 75 per cent of those voting on the day or by proxy - is approved.

Details of the plan will be sent to policyholders early next week.

Three categories of eligibility to receive shares have been set out by NIB's board.

Only members who had taken insurance before March 20 this year will qualify for the shares, designed to stop "carpetbaggers" buying into NIB to get free shares and then selling out as soon as it goes public.

Those with a basic "ambulance-only" insurance policy will receive 10 shares for every year they have been with NIB, but are guaranteed to get at least 100 shares.

The maximum allocation under this category has been capped at 300 shares.

Single-policy holders will receive 100 shares per year of membership, with a minimum allocation of 300 shares and a limit of 3000.

The biggest issues will be reserved for family-policy holders, who stand to gain 200 shares for every year they have been members.

They have been reserved a minimum of 600 shares while anyone who have been with NIB since it was founded in 1952 will get the maximum issue, capped at 30 years' membership, of 6000 shares.

© 2007 The Age

Back to News Index | Back to Home