Pre-emption rights

Pre-Emption Group (PEG) extends the easing of its issuance guidelines

Cliff Weight, Director, ShareSoc gives his personal views below which may not necessarily reflect ShareSoc's view. UK-listed companies hit by Covid-19 are being given an additional lifeline as the Pre-Emption Group (PEG) extends the easing of its issuance guidelines, allowing more share capital to be raised from shareholders. The PEG, the affiliate of the Financial Reporting Council that provides guidance on fundraisings and rights issues, has confirmed that the additional flexibilities put in place at the height of the pandemic will be extended ...

Pre-Emption Resolutions Likely to Change

Pre-Emption rights are a very positive feature of the UK stock market scene. They prevent companies from issuing shares without existing shareholder consent, except to a limited extent. That avoids excessive dilution without your consent. The Pre-Emption Group sets the guidelines for this voluntary system which generally means that for larger companies 5% is the limit without getting a shareholder vote in favour. A resolution to cover this for the next year is on most AGM agendas. The Pre-Emption Group have ...

Changes to Pre-Emption Rights Principles

The FCA have issued a note from the Pre-Emption Group giving some revised "principles" to be followed by public companies. As the note says "Pre-emption rights are a cornerstone of UK company law and provide shareholders with protection against dilution of their investments".  In general UK companies cannot issue more shares without the approval of shareholders, which is why on most Annual General Meeting agendas you see two linked resolutions that permit allotment of new shares and a partial disapplication of ...