Rights offerings are the new equity alternative in the
While traditional stock market offerings spotlight weak US
companies to public investors, non-traditional rights offerings
bring another choice to companies needing to raise equity under
UK and European lawyers wonder why US companies are
performing rights offerings when their model has failed too
often. US regulators, unlike UK ones, are more likely to adapt
to companies needs because of the disclosure a rights offering
"The regime in the UK is very prescriptive and that can be
limiting," said Anna Pinedo of Morrison & Foerster. "The US
gives a lot more latitude. Therefore the rights offering format
can be tailored to fit what the issuer needs to address. That
makes the US rights offering more effective."
Meanwhile, lawyers are structuring these rights offerings
for the first time and wondering what laws need to be met.