1.   The House of Lords found that there was no duty of care either to existing shareholders or to potential investors.

2.   This is something of a misnomer, as the offer is restricted to existing shareholders of the bidder on a prorata basis.

3.   A rights issue in which the existing shareholders may exercise their pre-emptive rights to subscribe to the new shares in proportion to those already held.

4.   Existing shareholders have pre-emptive rights to buy new shares in proportion to their existing holdings.

5.   However, the problem with a cash placing is that existing institutional shareholders may not be willing to consent to the disapplication of pre-emption rights.

6.   This is something of a misnomer, as the offer is restricted to existing shareholders of the bidder on a pro rata basis.

7.   Accordingly, the open offer and clawback preserves the pre-emption rights of existing shareholders of the bidder.

8.   Existing shareholders and employees will get the same incentives as the public as well as special treatment on allocation.

9.   A rights issue is a means by which a company raises capital by offering new shares to existing shareholders at a fixed price.