France’s Agence des participations de l’État (APE) has hailed the success of the initial public offering of gaming giant La Française des Jeux (FDJ), which could generate proceeds of €1.89bn (£1.62bn/$2.09bn) for the state.
Up to 99,320,000 shares in the business are set to be sold, representing approximately 52% of FDJ’s total share capital.
This comprised 40,172,148 shares which were sold to individuals and retailers making up FDJ’s sales network, representing 40.5% of all shares sold and generating proceeds of approximately €712m. Shares were sold to these entities priced at €19.50 each, including a 2% discount for retail investors.
These individual investors and retailers will be able to increase their holdings, provided they hold their shares for 18 months. After this period, these investors will receive one additional share for every 10 acquired.
A further €888m was raised through the sale of shares to French and international institutional investors, through the sale of 44,621,497 shares priced €19.90 apiece, or 44.9% of all issued shares. FDJ employees, meanwhile, purchased 3,176,327 shares, or 3.2% of the issued capital, bringing in €62m.
With the offering oversubscribed, an over-allotment option has been used to sell a further tranche of shares – up to 11,350,028 – that could bring in around €226m.
Based on the €19.50 retail investor price, this gives the business a market capitalisation of €3.7m, with 191,000,000 shares in circulation.
Before the over-allotment option is exercised, and before the distribution of free shares to individual and retailer investors, but including those sold to employees, the state’s stake in the business, originally 72%, has been reduced to 27.85% of FDJ’s share capital.
However, should the over-allotment option be fully exercised, and all individual investors hold their shares for the 18-month period, its holding would drop to 20%.
In addition to the French state, prior to the share sale 13.8% of FDJ was owned by individual investors, each with holdings of less than 5%. A further 9.2% was owned by the Union des Blessés de la Face et de la Tête (UBFT), a charity founded by French soldiers with facial or head wounds in 1921, with the operator's employees owning 5%.
The APE said the success of the IPO highlighted the confidence of national and international investors in the business. The shares will begin trading on the Euronext Exchange in Paris today (21 November). Settlement of the IPO orders will take place a day later, on 22 November.
“FDJ's initial public offering was a tremendous success, with individuals as well as domestic and international institutional investors,” FDJ chair and chief executive Stéphane Pallez said. “I am pleased that this IPO made it possible for French individuals to now own around 20% of FDJ's capital.
“I am also delighted that more than 80% of our employees decided to increase their holdings or become shareholders. These results confirm trust in the Group’s future. Thanks to the commitment of its 2,500 employees and to benefit all its shareholders, the Group will pursue a balanced expansion strategy, combining financial performance, responsible gaming and corporate social responsibility.”
The institutional share sale was led by BNP Paribas, Citi, Goldman Sachs and Société Générale handling the institional share sale, with Crédit Agricole Corporate and Investment Bank, HBSC and Natixis serving as associate bookrunners, with Crédit Industriel et Commercial (CIC) acting as joint-lead partner.
Crédit Agricole, meanwhile, served as the global coordinator for the retail investor sale, alongside Natixis. BNP Paribas and Société Générale acted as associate bookrunners, and CIC as joint-lead partner.
To reflect the evolving market, in which the French state is no longer a major player, the French government is amending its gambling regulations, creating L’autorité nationale des jeux (ANJ), a new regulatory body to oversee all verticals and channels.