Pre-emption rights—listed companies
Pre-emption rights—listed companies

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Pre-emption rights—listed companies
  • The statutory right of pre-emption
  • Making a pre-emptive offer under CA 2006
  • Exceptions to statutory right of pre-emption
  • Exclusion of pre-emption rights—articles with corresponding rights
  • Other circumstances in which the statutory pre-emption rights may not apply
  • Pre-emption rights under the LRs
  • Circumstances where the LR pre-emption rights do not apply
  • Disapplication of the statutory right of pre-emption
  • Disapplication pursuant to CA 2006, s 570
  • More...

Pre-emption rights—listed companies

Coronavirus (COVID-19): Following the coronavirus (COVID-19) outbreak, the Pre-Emption Group published a statement recommending that investors temporarily consider supporting non-pre-emptive issues of up to 20% of a company’s issued ordinary share capital, on a case-by-case basis. For more information on this departure from the guidance in the Pre-Emption Group’s Statement of Principles, see Coronavirus (COVID-19)—Statement of Principles—relaxation of rules below. For further details of the impact of COVID-19 more generally, see Practice Note: Coronavirus (COVID-19)—key issues for Corporate lawyers.

This Practice Note covers the issues relating to pre-emption rights of shareholders of listed companies. A listed company has obligations pursuant to provisions of the Companies Act 2006 (CA 2006) and the Listing Rules (the LRs) in relation to pre-emption rights. It may also observe the guidelines issued by institutional investor bodies, such as the Investment Association (IA), the Pensions and Lifetime Savings Association (PLSA) (formerly the National Association of Pension Funds (NAPF)), Pensions & Investment Research Consultants Ltd (PIRC) and Institutional Shareholder Services, Inc. (ISS).

For further information about general issues relating to pre-emption and for the considerations relating to other types of company, see Practice Notes: Pre-emption rights—general issues, Pre-emption rights—private companies with one class of shares and Pre-emption rights—private companies with more than one class of shares and public unlisted companies.

The statutory right of pre-emption

Under CA 2006, a company must not allot

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