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 ?
Michael Bush, the Company's President and Chief Executive Officer, also announced his intention to exercise his basic subscription privilege in full at a minimum.
TAVIX has agreed in the Oversubscription Agreement to exercise its Basic Subscription Privilege in full and, if the Rights Offering is undersubscribed, to exercise its Additional Subscription Privilege to subscribe for Subscription Receipts, including any such Subscription Receipts to be acquired under its Basic Subscription Privilege, having an aggregate subscription price of up to $62.
Shareholders who hold their shares through a broker, bank or other nominee should contact the broker, bank or nominee for further information concerning the non-transferable rights and the exercise of their subscription privileges.
25 per share for gross proceeds to the Company of $5,272,203 from the basic subscription privilege.
Perelman, has agreed to purchase its pro rata share (or approximately 61%) of the $107 million of Class A common stock covered by the rights offering, which share MacAndrews & Forbes would otherwise have been entitled to subscribe for in the rights offering pursuant to its basic subscription privilege.
Each Holder who elects to exercise his or her Basic Subscription Privilege may also subscribe at the Subscription Price for Underlying Shares, if any, remaining unissued after satisfaction of all subscriptions pursuant to the Basic Subscription Privilege.
The Company's stockholders who exercise their basic subscription privilege in full will also be entitled to purchase additional shares pursuant to an over-subscription privilege to the extent there are shares that have not been subscribed for by other holders pursuant to their basic subscription privileges.
05 per share, representing the number of shares that MacAndrews & Forbes would otherwise have been entitled to subscribe for in the rights offering pursuant to its basic subscription privilege (which was approximately 60% of the total shares sold in the rights offering and private placement combined).