Pre-emption rights

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 ...