subscription privilege


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Subscription privilege

The right of current shareholders of a corporation to buy newly issued shares before they are available to the public.

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.

subscription privilege

References in periodicals archive ?
In addition, the rights offering includes an over-subscription privilege, which entitles each rights holder that exercises its basic subscription privilege in full the right to purchase additional units that remain unsubscribed at the expiration of the rights offering, if any.
Also, due to the remaining shares available for issue, those rights holders validly exercising over subscription privileges will be allocated these on a pro rata basis based on the number of rights underlying their basic subscription privilege.
Also, approximately 96% of the shares to be issued as a result of the rights offering were subscribed for pursuant to validly exercised basic subscription privileges. As a result, the remaining shares available for issuance to those rights holders validly exercising oversubscription privileges will be allocated pro rata based on the number of rights underlying such rights holders' basic subscription privilege, Liberty added.
As part of the offering, the company has granted the rights holders with the ability to oversubscribe, which entitled each rights holder that exercises their basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering.
Zell/Chilmark Fund LP, which owns 20% of Revco common stock, has agreed to exercise its subscription privileges and to a standby purchase of all unsubscribed shares.
Subscribers in the rights offering, including Vintage Capital Management, LLC, subscribed for approximately 100.9 common shares, or 81.2% of the approximately 124.3 million common shares available, pursuant to their basic subscription privileges. Pursuant to the rights offering and the transactions contemplated by the standby purchase agreement between B&W and Vintage, Vintage also purchased the remaining 23.4 common shares available in the rights offering pursuant to its backstop commitment.
Subscribers in the rights offering that included Vintage Capital Management LLC, subscribed for an estimated 100.9 common shares or 81.2% of the about 124.3m common shares available, as per their basic subscription privileges. Pursuant to the rights offering and the transactions contemplated by the standby purchase agreement between B&W and Vintage, Vintage also bought the remaining 23.4 common shares available in the rights offering under its backstop commitment.