Under the Companies Act 2006, pre-emption rights allow existing shareholders the ‘right of first refusal’ when new shares are issued. According to 561(1) of the 2006 Act, shares cannot be offered to another person until an offer has been made (on the same or more favourable terms) to each existing shareholder, and any time limit given for the offer has expired.
At its core, this enables such individuals to protect their existing shareholding against further dilution of their shares – but typically ...