The board of MBF Australia has recommended a A$2.41bn cash offer from Bupa, the UK healthcare group, which intends to use the deal to become Australia’s largest healthcare insurer.

MBF’s board said the bid offered “a significant value premium” for its policyholders over an alternative plan to demutualise and then list on the Australian stock market. It has recommended the proposal to its governing council. Policyholders will also need to approve the transaction.