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HMRC internal manual

Capital Gains Manual

Definitions: issue of shares: alternatives to rights issues

A company may raise capital by issuing shares in ways which do not involve provisional letters of allotment (described in CG50293). The company nonetheless offers new shares on preferential terms to existing shareholders (or to a class of existing shareholders), who may choose not to take up some or all of their entitlement. These alternative methods may be referred to as open offers, entitlement issues, or vendor placings. For details, including guidance on a special class of open offer known as a compensatory open offer, see CG51755+.