FDJ secures regulatory approval for November IPO

21 October 2019

French gaming operator La Française des Jeux (FDJ) has secured approval from the country’s stock market regulator to proceed with its initial public offering (IPO), in a move that marks the first step towards the privatisation of the business.

The Autorité des marchés financiers (AMF) signed off on FDJ’s registration document, with trading expected to commence on November 21 after the price range for FDJ shares is published on November 6.

Plans to sell off the majority of the French state’s 72% stake in FDJ through an IPO have been in the offing since October 2018, when the country’s parliament approved the move.

The IPO is expected to take place on the Euronext market in Paris, although the transaction still remains subject to other regulatory approvals from the AMF.

“This privatisation project marks the start of a new chapter in the history of our company,” FDJ chief executive Stéphane Pallez said. “With its strong economic model supported by innovation, the group will pursue a balanced growth strategy, combining economic performance, responsible gaming and social commitments.

“Our ambition is to strengthen our position as the leading operator of lottery and sports betting in France, and to become a leading international player in the gaming and services sector.”

The Agence des Participations de l’Etat (APE), the state agency that handles the privatisation of state assets, in July selected a consortium of banks led by BNP Paribas, Citi, Goldman Sachs and Société Générale to serve as coordinators for the institutional share sale.

Earlier this month, France also introduced new gambling regulations, including the creation of a new national gambling authority, L’autorité nationale des jeux (ANJ) to replace current regulator, l’Autorité nationale de régulation des jeux en ligne (ARJEL), ahead of the privatisation.

Shortly after this announcement, FDJ published its financial results for the first nine months of 2019, the operator reporting a 7% year-on-year rise in revenue after experiencing a rise in stakes across all of its business units.

Revenue for the nine months through to 30 September amounted to €1.42bn (£1.23bn/$1.58bn), up from €1.33bn in the corresponding period last year.

In a statement confirming the IPO approval, FDJ said that it expects full-year revenue to amount to approximately €1.9bn, with lottery turnover to come in at over €1.55bn. Sports betting looks set to turn a revenue of €370m, with sales from adjacent businesses bringing in around €50m.

For 2020, FDJ said it hopes to grow turnover by 5%, with a 5% year-on-year rise in lottery revenue and 6% increase in sports betting revenue expected.

Image: Quinn Dombrowski