Shares For Everybody

Newcastle Herald

Friday July 20, 2007

GREG WENDT BUSINESS EDITOR

THOUSANDS of Hunter mums and dads are set to enter the stock market following a historic vote in Newcastle yesterday that could alter the makeup of Australia's health insurance industry.

NIB Health Funds is set to become the first private health insurer in the country to list on the Australian Stock Exchange in October.

And thousands of NIB members will become shareholders, some with up to 6000 shares, in what will be one of the largest listed companies in the region.

About 460 million shares will be issued, with the company valued at more than $600 million.

NIB chairman Keith Lynch said members voted overwhelmingly yesterday in favour of demutualising the fund.

More than 94 per cent of eligible policyholders who voted, and the required majority of company members, supported the move.

"This is a significant milestone in the 54-year history of NIB," Mr Lynch said.

Continued Page 4

NIB members approve $600m shares float

From Page 1

Demutualisation still requires formal approval from the Federal Court.

Share allocations, calculated on the type of policy held and years of membership, will range from a maximum of 6000 shares for members with a family policy to a minimum of 100 shares for ambulance only policyholders.

Some 100, 851 of NIB's 320,000 eligible policyholders voted for the proposal, while 5606 voted against.

The vote among the 50 company members is believed to have gone 43-7 in favour.

About 300 policyholders attended the meeting at Newcastle Entertainment Centre yesterday to vote, many of them hostile to the demutualisation.

In emotional speeches, they urged members to vote against the move, but in the end the vote was decisive.

Retired dairy farmer Lyall Lee travelled from Morisset to be at the historic meeting.

"I think it was important to come here and I noticed a few people seemed to want to get a few things off their chest," he said.

"I am concerned with the way shares have been allocated, but my biggest concern is that as a listed company NIB will be money-driven and premiums may go up."

Former NIB chief executive Colin Rogers said he believed in the old saying "If it ain't broke don't try to fix it", which drew loud applause from the floor.

Later Mr Rogers said that despite the decisive vote, which he believed was influenced by the share offer, he still had concerns about the continued prosperity and survival of NIB as a demutualised organisation.

"The decision has now been made and I hope and wish the board success in their future endeavours," Mr Rogers said.

Mr Lynch believed the health insurance industry would become increasingly competitive and the demutualisation would place NIB in a healthier position to compete in the market.

"We might be the first, but we won't be the last; we know our rivals will be watching this very closely," he said.

"With the private health insurance industry facing structural change, the board believes the demutualisation and proposed listing on the ASX will ensure NIB's ongoing sustainability and growth."

Mr Lynch said that with 7 per cent of the national market share NIB was extremely vulnerable to more aggressive competition.

The board believed listing would "unlock value in the business".

Mr Lynch said the interests of policyholders would continue to be served in terms of keeping prices affordable for members.

NIB chief executive Mark Fitzgibbon said NIB would become a truly national business and brand.

"We believe it enhances our strategic and capital flexibility and improves the prospects of NIB participating in mergers, takeovers and other corporate transactions," he said.

"This vote is a mandate for us to take the company to the ASX in October."

If the court grants approval, NIB intends to apply for a listing on the stock exchange within the next few months.

The Herald understands that a likely listing value would be 90 cents to $1 a share.

E

Editorial

Page 8

WHAT YOU NEED TO KNOW

* About 460 million shares

to be issued to eligible

policyholders

* Shares to be allocated to

policyholders as of March

20, 2007. Policyholders

after March 20, 2007, will

not be allocated shares

* NIB members can buy

extra shares before listing

* Shares to be allocated

to eligible policyholders

range from 100 to 6000,

based on type of policy

held and number of years

policy held

* Listing on stock

exchange expected to

occur within six months

of Federal Court approval

of demutualisation

© 2007 Newcastle Herald

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