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 ?
Rather, he wished to protect preemption rights purchased by Virginians after the Revolutionary War in which he had a personal interest and that were not directly at issue in the case.
Can the Issue of CBs Circumvent the Preemption Rights of Existing Shareholders?
Article 80 - Preemption Rights - preemption rights are still mandatory by operation to law under the New Law, as is the case under the Existing Law.
In the event that the GRB exercises its preemption rights in full, Anglo American, under the proposed transaction, would acquire an incremental 30 per cent interest in De Beers, taking its total interest to 75 per cent, and the consideration payable by Anglo American to the CHL Group would be reduced proportionately.
They also defeated a lawsuit by Yosemite residents forcing the federal government to recognize preemption rights in the valley.
5 billion purchase of Heritage Oil's 50 per cent share of Ugandan Blocks 1 and 3A -- in which London-listed Tullow Oil has preemption rights.
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.
6 billion purchase of Polygram, announced May 21 in New York, and, said one Lloyd Webber spokesman, remain essentially unaltered by it: "Andrew has legal preemption rights on that 30%; no one else can bid on it.
The proposed sale is subject to co-venturer preemption rights and Algerian government approval.