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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
A standard approach to every new funding round is to either obtain waivers from all non-participating shareholders in respect of their pre-emption rights, or otherwise offer the new shares to the existing shareholders first, and then (after the expiry of the period during which existing shareholders may exercise their pre-emption rights) offer the new shares to the new investors.
The further analysis of the structure of Article 47 of the current LoC shows that Paragraphs 3-7 stipulate the procedure for the implementation of the pre-emption right to purchase the shares offered to sale, and Paragraph 11 details specific exemptions where the pre-emption right shall not be applied: "If shares in a private limited liability company are disposed of in any other manner prescribed by law (other than by selling) or under the court decision, this Article shall not apply; however, in any case of share disposal, the number of shareholders in a private limited liability company may not exceed <...>" 249 shareholders (Art.
Eni has the option to terminate the SPA following an exercise by Tullow of its pre-emption rights. According to The Financial Times, Tullow Oil is planning to bid for the acquisition of oil and gas blocks in Uganda from Heritage Oil.
Reportedly, this capital increase was effected without any pre-emption rights for the existing shareholders of the company or others.
Additionally, 21% of shareholders voted against giving directors the authority to disapply pre-emption rights. Pre-emption rights provide shareholders with protection against dilution of their investments.
The acquisition is subject to government approval and the waiver of partner pre-emption rights, Tethys Oil said in a statement on its website.
'The acquisition is subject to government approval and the waiver of partner pre-emption rights. Closing of the acquisition is expected during the first half of 2019.
The total sales price of the transaction, which is conditioned on the government receiving funding approval from the Timor-Leste Council of Ministers and National Parliament, as well as regulatory approvals and partner pre-emption rights, is for $350M, prior to customary adjustments.
RockRose Energy said it has been informed that multiple partners in Wytch Farm (7.43%), which was part of the original deal, have exercised their pre-emption rights on that asset.
Nationally, people need to understand that given the current legislation and rulings by the STB, anyplace there is a railroad track in a neighborhood or through backyards, a railroad owner may purchase residential property and do anything they want under the federal pre-emption rights afforded to railroads.