Preemptive Right

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Related to Pre-Emptive Rights: Right of first refusal

Preemptive Right

The privilege of a stockholder to maintain a proportionate share of the ownership of a corporation by purchasing a proportionate share of any new stock issues.

In most jurisdictions, an existing stockholder has the right to buy additional shares of a new issue to preserve Equity before others have a right to purchase shares of the new issue.

preemptive right

n. the right of a shareholder in a corporation to have the first opportunity to purchase a new issue of stock of that corporation in proportion to the amount of stock already owned by the shareholder. (See: corporation, stock)

References in periodicals archive ?
The most commonly contested resolutions were authorities to issue shares without pre-emptive rights (which also received the highest level of shareholder opposition), followed by remuneration-related resolutions and director elections.
The pre-emptive rights period is expected to run from May 6 to May 17.
But if you issue new shares simply to allow the plan to acquire them, you may dilute the value of the shares and trigger the pre-emptive rights of other shareholders to participate in this new issue.
In summary, the proposal authorizes the Board of Directors, during the period until the next AGM, to issue new shares: (i) with pre-emptive rights for the stockholders to subscribe for the new shares; or (ii) with exclusion of pre-emptive rights for the company's stockholders to subscribe for the new shares in connection with an acquisition.
the shareholders having pre-emptive rights to purchase newly-issued
The equity offering and the pre-emptive rights offering in Colombia, which ended on January 27, 2012, will offer Bancolombia around USD892.
and Continental Europe to vote for waivers of pre-emptive rights, in order to promote broader access to equity capital for real estate companies.
The resolution of all the various pre-emptive rights is expected to take up to 90 days.
Brazilian airline GOL Linhas Aereas Inteligentes (NYSE: GOL and Bovespa: GOLL4) has filed a registration statement, effective immediately, with the US SEC for the registration of 2,470,794 preferred shares in a pre-emptive rights offering.
Campbell Soup Company (NYSE:CPB) announced its wholly-owned subsidiary, Arnott's Limited, has completed the sale of its Papua New Guinea (PNG) operations to two PNG government pension funds, after the pension funds exercised their pre-emptive rights to purchase the Arnott's PNG shares.
It is subject to the connected approvals from regulatory authorities and to the possible exercise of pre-emptive rights by other shareholders.