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 pre-emptive rights period is expected to run from May 6 to May 17.
Analysts said the verdict was a blow to Telenor even though it gave the Norwegian operator assurances that it would get its pre-emptive rights back if it won the arbitration case and that Telenor's voting stock in Vimpelcom would not fall below a 25 percent threshold until arbitration ends.
Telenor said it was seeking an injunction requiring Vimpelcom to issue it pre-emptive rights shares at the same time that Vimpelcom issues shares to Wind Telecom shareholders if that acquisition is completed.
Closing of the acquisition is subject to Wheaton River and Rio Tinto entering into a definitive agreement of purchase and sale, requisite regulatory and third-party approvals and consents, waiver of by BHP Billiton of its pre-emptive rights, satisfaction of customary closing conditions, and Wheaton River raising the required financing.
But a sale was complicated by the fact that privately-owned US firm Carlson holds 22 per cent of Thomas Cook and has pre-emptive rights to acquire the remaining 78 per cent.
The transaction puts paid to France Telecom's plans to buy more than 75% of E-Plus because BellSouth, one of the founding companies of E-Plus, has pre-emptive rights over the E-Plus shares put up for sale by Vodafone (17.
The deal is subject to pre-emptive rights by Disney subsidiary ESPN, which holds the remaining 32% of NetStar.
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.
Danish regional bank Vestjysk Bank A/S (CPH:VJBA) announced on Wednesday that the subscription period for the new shares has expired and that the offer of shares with pre-emptive rights has been fully subscribed for.
After several meetings in late February, sources said France Telecom agreed to cede the 10% stake in return of the government not exercising its pre-emptive rights over the deal before the Helios deal was announced.
The securities are denominated as 25 bonds of EUR 107,000 each and are initially being offered with pre-emptive rights to existing shareholders, who can exercise these rights until 24:00 CET on December 18.
The bank noted the state is not expected to exercise its pre-emptive rights and, as a result, its stake is seen to drop to some 60.