Includes video report
Francaise des Jeux (FDJ) SAEM shares soared as much as 20% after the French lottery operator raised about 1.89 billion euros (US$2.1 billion) in the country's largest initial public offering since the 2005 sale of power producer Electricite de France SA.
The government sold 52% of the company at the top of the marketed price range for institutional investors. Finance Minister Bruno Le Maire hailed a "spectacular success" that boosts the appeal of Paris as a financial center.
The government also sees a political dividend after a year of "Yellow Vest" protests in which President Emmanuel Macron was portrayed as an ally of the financial establishment and out of touch with ordinary people.
"This exercise reconciles the French people with markets and companies after the financial crisis," said Le Maire, who joined the heads of some of France's biggest banks at the Paris stock exchange to see Francaise des Jeux Chief Executive Officer Stephane Pallez ring the bell to open trading.
The IPO follows a run of poor performance for new listings in Europe and is a boost for Macron's efforts to modernize the economy and chip away at the national debt, which almost equaled France's entire national output last year.
Investors bid for 11.6 billion euros of stock, with institutions allocated shares at 19.90 euros each and individuals paying 19.50 euros. The sale surpassed the 1.67 billion euros raised by asset manager Amundi SA in its 2015 IPO to become the largest listing in the country since EDF brought in more than 7 billion euros for the state.
Francaise des Jeux has its roots in a national lottery created in 1933 to aid soldiers injured in World War I. The company earned 170 million euros on revenue of 1.8 billion euros last year. It sees revenue rising to 1.9 billion euros this year, according to figures issued on Oct. 18 when the government announced regulatory approval for the sale.
Financiere de la Cite bought the stock as it offers stable profit growth and the company can use M&A to expand in Africa and develop its sports betting technology, said Alexis Charveriat, a European equity manager at the Paris-based investor.
He said Francaise des Jeux has the "greatest retail network in France" after state postal service La Poste, and could use its outlets to offer other services.
The government sold 99.3 million shares in the IPO, assuming underwriters exercise their right to sell additional stock. The state's ownership falls to 20% from 72%.
France ran ads to encourage small investors to buy the shares, touting the company's dividend prospects and its long history in France. Individual investors could buy shares at a 2% discount and were allocated 40.5% of the offering. The government sweetened the deal further with a promise of one free share for every 10 bought if investors keep the stock for at least 18 months.
FDJ aims to pay 80% of net income in dividends as early as next year, Pallez said on Nov. 7.
BNP Paribas, Citigroup, Goldman Sachs and Societe Generale are the global coordinators on the IPO, with Credit Agricole, HSBC and Natixis as bookrunners and CIC as co-lead manager.
VIDEO: Watch the report