Rights issues—key considerations

Copyright © 2025 LexisNexis
Produced in partnership with James Ufland of Slaughter and May and Chris McGaffin of Slaughter and May
Practice notes

Rights issues—key considerations

Copyright © 2025 LexisNexis

Produced in partnership with James Ufland of Slaughter and May and Chris McGaffin of Slaughter and May

Practice notes
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This Practice Note focuses on the key legal considerations when a Rights Issue is being carried out by a company either:

  1. •

    admitted to Listing on the Official List of the Financial Conduct Authority (FCA) (Official List) and to trading on the main market for listed securities of the London Stock Exchange (LSE) (Main Market) (listed company), or

  2. •

    admitted to trading on AIM, a market operated by the LSE (AIM company)

(both a listed company and an AIM company being a company).

For a description of the procedure for a rights issue, see Practice Note: Rights issue—procedure for a listed company.

What is a rights issue?

A rights issue involves a company:

  1. •

    making an offer of securities to its existing shareholders

  2. •

    in proportion to their holdings in the company

  3. •

    by means of the issue of a renounceable letter (or other negotiable document) (provisional allotment letter or PAL)

The offer price will be payable in cash and is usually at a deep discount to the

James Ufland
James Ufland

Slaughter and May

James is an Associate at Slaughter and May and advises on a range of corporate and commercial matters. His experience includes advising FTSE 100 companies on equity capital markets matters.

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Chris McGaffin
Chris McGaffin

Slaughter and May

Chris is a partner at Slaughter and May, with a broad corporate practice including public takeovers, private M&A and equity capital markets. Chris spent six months as an investment banker on secondment at Barclays Capital in 2011.

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Rights issue definition
What does Rights issue mean?

A form of company fund raising where existing shareholders are given rights to purchase newly issued shares in proportion to their existing holding.

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