Pre emption10 Jul 2018 14:15
Can anyone help me understand the pre emption clause? My understanding is that if we have pre emption rights they have to offer us shares on the same terms as they are offering everyone else. If we wave them they can sell/give them to anyone.
Great if they’re going to the broker and offering a discount, why wouldn’t we all want to buy at the same discount? Although obvious that would need a big announcement that a discount placing was about to happen to make sure everyone with rights knows about it, which would drop the price which would still need discounting and they’d raise about half the cash for the same shares.
But what if they’re offering the shares to a partner as part of a deal? Would they then have to offer them all to us first, delay the deal, break all the confidentiality around the deal and generally make the partner run in the opposite direction? My understanding was that was what shareholders put in place to avoid takeovers? A poison pill scenario?
Or have I misunderstood?