FDJ Sees Shares Soar After Companies IPO

On the first day of trading, French lottery and sports betting company Française des Jeux (FDJ) saw its share price increase following its latest initial public offer.

After the company’s IPO earlier this week, FDJ began its new life as a publicly traded company on Thursday. Until closing at € 22,71, the company’s shares traded as high as € 24, a gain of almost 16.5% from the retail investor value of € 19.50 per share. French finance minister Bruno Le Maire called the “immense success” of the public launch of the FDJ.

The IPO, of which 45 percent was reserved for French investors, earned around € 1,6b, while the government is also in line for a € 380 m top-up after ensuring that FDJ maintained its local monopoly on lottery and retail sports betting activities, making its shares more lucrative to investors.

The privatisation of the FDJ represents a major step forward in the efforts of the French government to shed control over some major government assets and raise significant amounts of cash to fund government programmes. After the IPO, the government’s share in the FDJ was reduced to 21.9 percent and could be further reduced by 2 percent if there were enough shareholders holding on to their new FDJ stock certificates for at least 18 months.

In the first nine months of 2019, FDJ’s latest financial report card showed the company’s net gaming revenue rising 7% to just over € 1,42b. Nearly one-fifth of its total sales during the period accounted for the digital operations of the company.

France’s private casino operators expressed concern about the reluctance of the government to explain if FDJ’s 30k retail outlets would be allowed to add slot machines after their privatisation. Regional casinos claim that this “distortion of competition” would cause a good portion of their employees to be sacked.

The government was also coy on rumours that the digital operations of FDJ will be allowed to offer online casino products someday. French-licensed online gambling operators are currently limited to sports and racing wagers, as well as to poker tournaments and cash games, but online slots and tables remain unlimited, for now at least.