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Resolution for Disapplying Pre-Emption Rights

The Pre-Emption Group has published a monitoring report on the implementation of its 2015 Statement of Principles for disapplying pre-emption rights and a template resolution for disapplying pre-emption rights.

The monitoring report reveals that the 2015 Statement of Principles was generally adhered to but, having considered the views of investor representatives on best practice, the Pre-Emption Group decided to publish a template resolution for disapplying pre-emption rights to assist companies.

The template recommends issuers propose two separate resolutions:

  • The first resolution is to seek a five per cent disapplication to be used on an unrestricted basis.

  • The second resolution, which should only be put forward when appropriate, is to request authority to disapply pre-emption rights when the board considers the use to be for an acquisition or specified capital investment in accordance with the 2015 Statement of Principles.

Where the second resolution is proposed, companies should disclose the circumstances that led to its proposal and the consultation process undertaken.

The Pre-Emption Group encourages companies to use the template resolutions at their next general meeting but will be expected to use them for meetings held after 1 August 2016.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume VI, Number 130
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About this Author

Hannah Kendrick Corporate Attorney Squire Patton Boggs Leeds, UK
Partner

Hannah leads our Corporate Practice in Leeds and has a wide range of experience advising both public and private companies on mergers and acquisitions, fundraisings, takeovers, restructurings and reorganisations.

Her work varies between UK and cross border and she works closely with executives, in-house legal teams and general counsel both in the UK and globally.

Hannah is a member of the Regional Advisory Group of the London Stock Exchange plc for the North East.

44 113-284-7620
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