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Preemptive Right
(redirected from Subscription privilege)

    Also found in: Dictionary/thesaurus, Financial 0.03 sec.

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)
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The preliminary results indicate that the offering has been over-subscribed and, accordingly, the Company will issue a total of 2,000,000 shares to stockholders that exercised their basic subscription privileges and their over-subscription privileges.
BioMimetic Therapeutics, Inc. Announces Preliminary Results of Rights ... by Business Wire
The proposed rights offering will also include an over-subscription privilege which will entitle each rights holder that exercises all of its basic subscription privilege in full to purchase any shares not purchased by other stockholders pursuant to their basic subscription privilege at the same subscription price per share that applies to the basic subscription privilege (the "over-subscription privilege").
Deltek, Inc. Announces Proposed $60 Million Rights Offering by Business Wire
Pursuant to an over-subscription privilege, each rights holder that exercises its basic subscription privilege in full could also subscribe for additional shares at the same subscription price per share, to the extent that other stockholders do not exercise their subscription rights in full.
Revlon Announces Plans to Reduce Debt by $170 Million by Business Wire
 
 
 
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