A pre-emptive offer to shareholders to subscribe for new shares, usually at a discount to their current market price.

The right to apply for new shares is given to shareholders who hold their shares in certificated form by way of an application form, and to shareholders who hold their shares in CREST by way of a credit of open offer entitlements (the security which represents the right to apply for open offer shares) to their stock accounts in CREST. Unlike in a rights issue, the "right" to subscribe for open offer shares is not a tradeable security and a shareholder that does not take up their entitlements will not receive any proceeds from the sale of those shares in the market.

An open offer may include an excess application facility whereby any shares that are not taken up in the offer will be allocated to those applying for shares in excess of their minimum entitlements. It may also be accompanied by a placing (the terms "placing and open offer" and "placing subject to clawback" are used interchangeably) where the new shares are "placed" with investors subject to clawback to satisfy acceptances by shareholders.

For further details, see Practice note, Placings and open offers.

For summaries of open offers announced by companies listed on the Main Market or with shares admitted to trading on AIM within the scope of the What's Market database, see What's Market: Open offers.