preemptive right


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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 ?
A preemptive right, or right of first refusal, does not give its holder the power to compel an unwilling owner to sell; it merely requires the owner, when and if he decides to sell, to offer the property first to the party holding the preemptive right so that he may meet a third-party offer or buy the property at some other price set by a previously stipulated method.
Subsequently, Telenor has sought to enforce what it considers the exercise of its preemptive rights.
The exercise of Telenor's preemptive rights would mean additional dilution for minority shareholders and could be an additional
Of the total 60 million preferred shares that were offered, 21,307,238 preferred shares were subscribed in the local preemptive rights offering, at a price of Ps 15,205 per share, for an aggregate amount of approximately Ps 323,976 million (US$ 165.
7% of existing shareholders are eligible for preemptive rights.
The aggregate amount of the Equity Offering combined with the aggregate amount of the preemptive rights offering in Colombia that ended on July 9, 2007 will result in approximately US$ 445.
In the offering, each person who held Tully's common stock on the dates of specified prior offerings of Tully's securities has been given the right to purchase common stock and investment units at the prices and in the amounts that they could have purchased such securities had they exercised preemptive rights in the earlier offerings.
The cut-off date for minorities eligible to participate in the realization of preemptive rights was 26 March.
Bancolombia") announces that the subscription period for its preemptive rights offering in Colombia ended on July 9, 2007.
The actual number of ADSs being offered in the Equity Offering will be determined following the outcome of the Bank's preemptive rights offering conducted in Colombia, which is expected to be completed on July 9, 2007.
Nasdaq: INKP) today announced that the Company entered into an agreement with an undisclosed third-party who will fund its settlement of damages and costs incurred in connection with the class action lawsuit related to the denial of certain claimed preemptive rights.
The preferred shares will be offered initially to the shareholders of record of Bancolombia as required by the preemptive rights contained in Bancolombia's by-laws.