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 ?
In total, 153,694,962 common shares issued in the rights offering were distributed under basic subscription privileges, of which 140,409,580 were distributed to insiders of the Company and 13,285,382 were distributed to non-insiders.
The subscription agent informed the company that the rights offering was fully subscribed, with 15,833,634 shares of series C Liberty Braves common stock to be issued to those holders of rights exercising basic and if applicable, over subscription privileges.
TolnaiCo"), a corporation controlled by Peter Tolnai, Pinetrees Chairman and Chief Executive Officer, has advised Pinetree that it intends to participate in the rights offering through the Basic Subscription Privilege and, to the extent applicable, the Additional Subscription Privilege.
A total of 14,035,706 common shares were issued under the basic subscription privilege and a total of 10,715,725 common shares were issued under the additional subscription privilege, resulting in the total number of issued and outstanding common shares of the Company currently being 123,757,157 common shares.
Due to the exercise of the additional subscription privilege by rightholders, including Brookfield, it was not necessary for Brookfield to purchase shares pursuant to the terms of the standby purchase agreement dated November 1, 2012.
Accordingly, shareholders who fully exercise this privilege can subscribe for additional shares if all available shares are not bought under the basic subscription privilege, or by Kenneth R Lehman as per the Securities Purchase Agreement of 24 March 2014, subject to certain limitations.
The proposed rights offering will also include an over-subscription privilege, which will entitle each rights holder that exercises all of its basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among persons exercising this over-subscription right.