The Pre-Emption Group has published a revised statement of principles for the disapplication of pre-emption rights. The statement of principles is intended to provide guidance to companies and shareholders on the factors to take into account when considering whether to disapply pre-emption rights and is supported by PLSA and the Investment Association.
The statement was last published in 2008. Although no changes have been made to the key thresholds for the general disapplication of pre-emption rights, the principal amendments include:
- Clarifying the scope of the statement: it applies to both UK and non-UK incorporated companies whose shares are admitted to the premium segment of the Official List.
- Clarifying that the statement applies to all issues of equity securities that are undertaken to raise cash for the issuer or its subsidiaries, regardless of the legal form of the transaction, including, for example, cashbox transactions.
- Introducing greater freedom to undertake non-pre-emptive issues of equity securities in connection with an acquisition or specified capital investment, to allow companies the opportunity to finance expansion opportunities as and when they arise.
- Introducing greater transparency on the discount at which equity securities are issued non-pre-emptively.
Although The Pre-Emption Group encourages companies and investors to use the revised statement immediately, it acknowledges that, as the 2015 AGM season is imminent, a measure of flexibility may be required.
We have produced a more detailed note on the revised Principles which can be located on our website.
A copy of the Statement of Principles can be viewed on the Pre-Emption Group website. (PDF)