open offer

An issue of shares by a company for cash to existing shareholders on a basis pro rata to existing shareholdings. It is similar to a rights issue. However, the key difference is that the right to subscribe for shares in an open offer is not renounceable, i.e. it cannot be sold on to another investor (See renounceable document). In a rights issue, the investor can if he wishes sell the right to subscribe for the shares to another investor. Dresdner Kleinwort Wasserstein financial glossary

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A mechanism by which issuers raise funds through a pro-rated offer of new shares to existing shareholders. Each qualifying shareholder is entitled to subscribe for new shares, but entitlement is not readily transferable and, if the entitlement lapses, holders do not receive any compensation. Euroclear Clearing and Settlement glossary

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entitlement issue (open offer)

Shareholders are given the right to subscribe for the new fully paid share. The new shares are not issued in nil paid form. London Stock Exchange Glossary

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open offer open offer ➔ offer²

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open offer UK US noun [C] FINANCE

► an offer made by a company to its shareholders inviting them to buy new shares in the company at a fixed price, which is normally lower than the usual price: »

The company plans to raise cash for the acquisition through an open offer of 30 million new shares.