preemptive right

(redirected from Pre-Emptive Rights)
Also found in: Dictionary, Thesaurus, Legal.
Related to Pre-Emptive Rights: Right of first refusal

Preemptive right

Common stockholders' right to anything of value distributed by thecompany.

Preemptive Right

In stock, the ability of a shareholder to maintain the same percentage of ownership in a company should the company issue more stock by subscribing to a proportional number of shares at or below the market price. This protects the investor from devaluation of his/her shares if the company decides to hold a round of financing. The purchase of this proportional number of shares usually takes place before the new issue is offered to the secondary market, and must be exercised before a certain date (known as the expiration date) if the shareholder is to maintain the same percentage of ownership. It is also called a subscription right. See also: Anti-dilution provision.

preemptive right

A stockholder's right to keep a constant percentage of a firm's outstanding stock by being given the first chance to purchase shares in a new stock issue in proportion to the percentage of outstanding shares already held. Not all firms provide the preemptive right, which is more important to stockholders owning a significant part of a company. Also called subscription privilege. Compare privileged subscription. See also special subscription account.
References in periodicals archive ?
To fulfill the obligations under the stock option plan, the Board of Directors has the right, through exclusion of the stockholders' pre-emptive rights, to issue a total of no more than 300,000 warrants.
In the midst of the financial crisis, Cohen & Steers first made the case that pre-emptive rights in the U.
Before the pre-emptive rights exercise, Campbell had announced that Arnott's Limited had entered into a sale agreement with Goodman Fielder to purchase its PNG operations.
Rizal Bank said that the board has also approved the removal of shareholders' pre-emptive rights to subscribe or buy any share.
The company is in the process of a pre-emptive rights offering (at RUB 278/share, or USD 9.
SIA had attempted to take a 50% stake in Ansett in 1999, but was prevented from doing so by Air NZ exercising its pre-emptive rights.
The issue may deviate from the shareholders' pre-emptive rights through a non-cash issue, through offsetting or may otherwise be subscribed for in accordance with chapter 13 SS 5, paragraph one, 6, of the Companies Act.
SHANGHAI, June 5, 2014 /PRNewswire/ -- Semiconductor Manufacturing International Corporation ("SMIC"; NYSE: SMI; SEHK: 981), China's largest and most advanced semiconductor foundry, announces the placing of existing shares and subscription of new shares, proposed issue of US$ 95 million zero coupon convertible bonds due 2018, and pre-emptive rights of Datang and Country Hill.
On 12 May, the Baku Stock Exchange announced expiry of term of pre-emptive rights of holding s existing shareholders for its next issue shares.
Jyske Bank (CPHN: JYSK) said that its supervisory board has decided to utilise its authorisation to increase share capital in the form of a capital increase with pre-emptive rights to the bank's existing shareholders.
regard, CNPC is asserting that they have certain pre-emptive rights to acquire