Jurisdiction(s):
United Kingdom
Key definition
Dilution definition

What does Dilution mean? In corporate and securities practice, dilution describes a decrease in an existing shareholder’s percentage ownership, voting power and per‑share value when a company increases its issued share capital. It typically arises on an allotment of new ordinary shares or the conversion or exercise of convertible securities, warrants or employee share options, and can reduce earnings per share (EPS) and book/net asset value per share. Economic dilution can also occur where shares are issued at a discount to market or net asset value. The term is descriptive rather than defined in legislation, but related rules govern how dilution may occur...

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Precedent anti-dilution provisions for Articles of Association (non-leveraged): Preferred Share ratchets—full, narrow- and broad-based weighted average; bonus issue capitalisation, adjustment mechanics and carve-outs

Precedents
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Insert new Article 14 as set out below:

14. Anti-Dilution

14.1 In this Article 14, unless the context indicates otherwise, the expressions below shall bear the definitions: New Securities means any Shares or other securities convertible into, or conferring the right to subscribe for, Shares, issued by the Company after the date these Articles were adopted...

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Web page updated on 22/05/2026

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