A pre-emptive subscription right (droit préférentiel de souscription — DPS) is a legal right attached to each existing share in a French company (Code de commerce) allowing shareholders to subscribe to newly issued shares in proportion to their current ownership, preserving their percentage interest in any capital increase. It protects against involuntary dilution. In France, DPS are legally mandatory for all capital increases unless waived by an extraordinary general meeting. They can be exercised (to maintain ownership), traded (sold to other investors) or waived. Their valuation is derived from the implied subscription price versus the current market price.

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Example: a French SA raises CHF 3.0 million by issuing 300,000 new shares at CHF 10 each. A shareholder holding 15% (150,000 shares of 1,000,000) receives 45,000 DPS entitling them to subscribe to 45,000 new shares. If they exercise all DPS, they maintain their 15% stake in the enlarged capital. The DPS theoretical value = (share price before increase - subscription price) × new shares / (existing + new shares).

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Hectelion analyses DPS implications and dilution impacts in capital increase and fundraising structuring mandates for French companies.