Preemptive Right

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Related to Preemptive Rights: Right of first refusal, Drag Along Rights

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 ?
Not every issuance of stock triggers the preemptive rights of other shareholders, and state law should be consulted in this regard.
Largely because of these policy concerns, an increasing number of states have statutorily exempted both options and preemptive rights from the scope of the Rule.
Monzon added the existing institutional shareholders of PSE were likewise requested to waive their preemptive rights.
The new series will be non-convertible and shall have no voting and preemptive rights.
Clavis intends to launch a one-for-one rights offer of NOK54m with preemptive rights for its shareholders in a drive to obtain growth capital for its new business direction.
As part of an offering that began on 11 May and closed on 9 June, the bank's shareholders exercised their preemptive rights and bought 41.
The share offering is to start from 18 May 2012 with shareholders with preemptive rights able to exercise the latter until 24 May.
SIA had offered to buy that 50% from News Corp Ltd in 1999 but Air New Zealand had threatened to activate its preemptive rights to block the sale.
As a result of Clearwire's sale of exchangeable notes, Sprint has preemptive rights for a period ending on Jan.
The company will seek the right to deny preemptive rights for issuances or dispositions of common shares.
Previously, in November, fortunateley, the firm had ended Limited Public Offering with Preemptive Rights ( "rights issue").
8m) through the exercise of preemptive rights by shareholders.