On 12 May 2017, the Pre-Emption Group published a monitoring report on the implementation of its 2015 Statement of Principles and the use of the template resolutions for disapplying pre-emption rights. The Principles were updated in 2015 to allow companies issuing shares for cash to seek authority by way of an additional resolution to disapply pre-emption rights up to an amount equal to a further 5% of the company's issued share capital. The additional 5% authority may be sought for the purposes of an acquisition or specified capital investment, and should not be applied for automatically but only when it is appropriate for the company's circumstances.
Key determinations and recommendations of the report are set out below:
- The Principles and template resolutions have generally been adhered to, although there have been instances of possibly poor consultation and disclosure.
- Companies and investors should address both the spirit and letter of the 2015 Statement of Principles in discussions.
- A request for a general disapplication is likely to be supported subject to certain conditions (size, duration and resolution format). However, this does not reduce the importance of effective dialogue and timely notification.
- Representatives of listed companies, investors and intermediaries support the 2015 Statement of Principles.
The monitoring report is available at:
To assist companies, the Pre-Emption Group also published an Appendix of Best Practice, which is available at:
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