Pre-emption right vs Right of first refusal
Today we look at the difference between a Pre-emption right and a Right of first refusal.
Pre-emption Right: A pre-emption right is also known as a “right of first offer”. With reference to shares, this right may be found in the articles of association and grants existing shareholders the first opportunity to purchase new shares in a company before they are offered to third parties. This is generally to prevent the dilution of their shares in the company. New shares must be offered to existing shareholders in proportion to their existing holdings. If these shareholders decline to buy the shares, then the new shares may be offered to outside parties. Continua a leggere