Medibank Private Ltd (ASX: MPL) shares closed 3.9% higher today as media reports speculated that an offshore strategic buyer may be building a position in anticipation of an acquisition.
The Australian Financial Review Street Talk column reported that "there is an offshore strategic name that has quietly taken an interest in the $7.1 billion listed Australian health insurer, which may be the beginning of something larger".
After almost forty years as a government enterprise, Medibank was floated on the ASX in 2014. Prior to its IPO, there had been speculation that the company would likely become the target of a takeover, particularly from an overseas bidder.
But when Medibank was privatised and publicly listed, the float came with the restriction that no one investor would be able to buy more than a 15% stake in the health insurer, effectively blocking potential takeovers.
This restriction lapses, however, on December 1 of this year, and an overseas insurer may already be eyeing off Australia's second largest health insurer.
While Medibank shares aren't as cheap as they were a couple months ago, they're still in the lower end of their 12-month trading range and so the timing wouldn't be bad for a potential buyer to be quietly building its stake. Australian laws designate that a potential acquirer only has to give a "substantial holder notice" to the target company and the ASX once it owns 5% of the target's shares.
All this remains speculation, however, as there's no way of pinpointing what truly drove Medibank's share price gain today.
