FDJ: Deutsche Bank upgrades to buy

(CercleFinance.com) - On Tuesday, Deutsche Bank upgraded its recommendation on the Française des Jeux share from 'hold' to 'buy', also raising its target price for it to E42 (from E38).


In a note, the broker points out that the online gaming sector has seen its share of mergers in the past, generally motivated by the desire to share technology platforms, pool marketing expenses and streamline costs.

With the addition of a few synergies, players who have opted for such consolidation moves have generally been able to grow their profits, it points out.

From Deutsche Bank's point of view, FDJ's E2.5bn acquisition of Kindred follows a "different logic".

Formalised last January, this operation, which is currently proceeding "at a slow pace" according to the broker, still needs to get the go-ahead from the French authorities in November, and also be approved by at least 90% of the target's shareholders.


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