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.