The state sells 52 percent of the company’s shares. The subscription period for investors began on Thursday. The loyalty of the shareholders should be rewarded.

Well mixed: Euro Millions balls from the French lottery company Francaise des Jeux

In France began a long time ago a major privatization, which should produce a people’s share: The subscription period for the shares in the lottery provider Française des Jeux (FdJ) began on Thursday. Investors can subscribe to the shares until November 21, the day the company goes public.

The French government is reducing its stake in the company from 72 to 20 percent. “In times of low savings rates, this is an opportunity for the French to diversify their investments,” says French Finance Minister Bruno Le Maire.

According to Thursday’s announcements, the shares will cost between EUR 16.50 and EUR 19.90 per share, which is roughly in line with analysts’ expectations. The company is valued at 3.15 to 3.8 billion euros. FdJ is seen by investors as a safe investment that can be compared to utility companies.

For one thing, the French bet in good times and bad. On the other hand, the company enjoys the monopoly on the drawing of the lottery numbers, on various scratch cards and sports betting in physical shops, with the exception of horse races.

10.7 billion euros in profit

The company has 30,000 sales outlets, often in bar tobacco shops. FdJ achieves 90 percent of the total turnover of 1.8 billion euros within its monopoly rights. Last year, the lottery company recorded stakes of 15.8 billion euros and distributed winnings of 10.7 billion euros.

The state is cashing in heavily: 3.3 billion euros went to the state in the form of taxes in 2018. This will continue to be the case, emphasizes the government, which is hoping for a good deal. In addition to the stable tax revenues, privatization revenues of 1.6 to 1.9 billion euros are now added. The government wants to put this money into a fund to promote innovation. Only dividend payments will go down. But that is a smaller item: Last year, the French state received 87 million euros from it.

The French don’t really like stocks

As individual shareholders, the French are not fans of stocks. Earlier partial privatizations such as that of Eléctricité de France (EdF) in 2005 or of the gas producer Engie and the airline Air France led to considerable price losses over the years. In contrast, the state sales of shares in the aerospace group EADS (now Airbus) and in the engine manufacturer Safran went better.

In order to make the FdJ share attractive, private investors receive a discount of 2 percent on the issue price. In addition, after a holding period of eighteen months, they will receive a free share certificate for ten shares purchased.

So that FdJ also respects the regulation as a private company, the government wants to introduce a new supervisory authority in the coming year. The aim is to keep gambling addiction within limits and protect minors. The existing shareholders, including two foundations for war invalids (13 percent) and the employees (5 percent) keep their shares.