Definitions for "Pre-Emption Rights"
The rights of existing shareholders to maintain their proportionate ownership of a company.
The rights of shareholders to be offered new issues of share before they are offered to non-shareholders.... more on: Pre-emption rights
There is an obligation set down within the UK Companies Act that, whenever a company issues shares for cash, those shares must first be offered to existing shareholders. This right of pre-empting gives rise to rights issues.