Preemptive Right

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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 ?
able to complete due to the exercise of the preemption rights by any of
5 billion purchase of Heritage Oil s 50 percent share of Ugandan Blocks 1 and 3A -- in which London-listed Tullow Oil Plc has preemption rights.
95% stake in Iberia through the acquisition of shares being sold by BBVA and Logista, to which it has preemption rights as a core shareholder under a 1999 agreement.
Ownership of the Teesside plant is split between Enron and a number of other companies, which were last week working on unravelling a complex set of preemption rights and forward power contracts associated with the plant.
Third Worlders are organized in modern-day claim clubs, and their governments have begun to give them preemption rights.
The proposed sale is subject to co-venturer preemption rights and Algerian government approval.
The Company refused placing terms at a higher price with preemption rights protected The Board did not disclose to shareholders, nor has yet explained its reasons for rejecting, an offer by Worldview effectively to underwrite the Placing at a higher price which would have respected pre-emption rights.
The transaction should get preemption rights and government approval.
The stake buy in Kashagan field is subject to approval of governments of India and Kazakhstan and also the other partner in the Caspian Sea field waiving their preemption rights.