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 ?
Article 197 - Sale of Entitlements to Rights Issue - Shareholders have preemption rights to subscribe for their company's capital increase (Rights Issue).
The way to combat the "curse," he proclaimed, was a homestead act for surveyed government land and preemption rights for unsurveyed land.
Those who had already secured preemption rights then sought to preserve their claims legally.
Can the Issue of CBs Circumvent the Preemption Rights of Existing Shareholders?
An Eni spokesman explained that Eni revoked the agreement signed on 18 December to buy Heritage's 50% stake in Ugandan Blocks1 ad 3A, on which UK oil and gas company Tullow (LON:TLW) has exercised preemption rights.
Subject to various government approvals, Kazakhstan state preemption rights and co-venturers' preemption rights, ONGC Videsh Limited, the international arm of Oil and Natural Gas Corporation Limited, India, would acquire ConocoPhillips' interest in Kashagan, which is located in the Kazakh sector of the Caspian Sea.
M2 EQUITYBITES-September 12, 2016-Total E&P USA exercises preemption rights on Barnett Shale assets
to authorise die Board of Directors to issue new shares and/or convertible debentures corresponding to in total not more dian 34,000,000 new shares, with or without the application of die shareholders preemption rights, in order to enable die Company to make business acquisitions or other major investments; and to authorize die Board of Directors to decide 011 repurchases and sales by the Company of its shares on NASDAQ Stockholm, where die number of shares so repurchased shall be limited so tliat shares held in treasury from time to time do not exceed five per cent of all outstanding shares of the Company.
Eni terminated on Friday the agreement signed on 18 December to buy Heritage's 50% stake in Ugandan Blocks 1 ad 3A, on which UK oil and gas company Tullow (LON:TLW) had exercised preemption rights.
Subject to approval of the Government of Senegal and co-venturer preemption rights, the sale transaction is anticipated to close by year-end 2016.
54 billion, but the deal was subject to preemption rights of ONGC and Shell.
At the end of 2003, if the Kingdom of Marocco does not place an additional 16% interest in Maroc Telecom with a third party investor, or VU exercises preemption rights, puts/calls may be exercised between the parties at then fair market value.