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IntermediateBrazilian REITs · Lesson I1.4 · Module I1

Pre-emptive rights, leftovers and dilution

Module I1: How a FII is born and grows

10 slides~4 minquiz at the end

In this lesson

  • The subscription ratio math
  • Diluted stake vs lost value
  • The 12 and 13 tickers on your screen
See the slides
Pizza cut into eight slices, seen from above

Brazilian REITs · Lesson I1.4

The pizza grew. Did your slice shrink?

New offerings, pre-emptive rights and the difference between diluting and losing money.

The subscription ratio

How many new shares you can claim

500,000new shares÷1,000,000current shares=0.5ratio
1,000your shares×0.5=500shares you may buy
500×R$ 100offer price=R$ 50,000to exercise it all

Illustrative fund: 1 million shares with a book value of R$ 100 each.

Exercise or not

What changes is your % slice

Exercised

0.100%

  • 1,500 of 1,500,000 shares
  • each share has R$ 100 of book value

Did not exercise

0.067%

  • 1,000 of 1,500,000 shares
  • each share is still worth R$ 100

Offering at R$ 100, equal to book value. Offering costs ignored.

Price decides

Offer price → book value per share after

  1. −3.3%R$ 90 → 96.67
  2. no changeR$ 100 → 100
  3. +3.3%R$ 110 → 103.33
before: R$ 100

Below book value, existing holders lose value per share (lesson A4.1).

Bars start at R$ 90. E.g.: (R$ 100M + 500k × R$ 90) ÷ 1.5M shares = R$ 96.67.

The rounds of an offering

Who gets the new shares first

  1. Pre-emptive rightholders claim their ratio
  2. Leftoversunclaimed shares go to those who exercised
  3. General offeringthe rest goes to the market

A common setup. Whoever approves the offering decides on pre-emptive rights; each offering's rules are in its notice.

On your broker's screen

Same fund, three endings

11the share you already hold 12the pre-emptive right 13the receipt after subscribing

When the offering ends, the receipt becomes an 11 share. Some offerings let you sell the right on the exchange.

Source: B3, Bora Investir portal.

Remember this

Three ideas from this lesson

  1. Ratio × your sharesThat is how much you may subscribe with priority.
  2. Diluting is not losingWithout exercising, your % falls, not the share's value.
  3. The offer price rulesBelow book value, existing holders lose value.

Quick quiz · 1 of 2

Offering exactly at book value and you don't exercise. What falls?

See answer

Only your stake. New money comes in at the same value per share, so book value per share stays the same.

Quick quiz · 2 of 2

Ratio 0.25 and you hold 400 shares. How many can you subscribe?

See answer

400 × 0.25 = 100 shares with priority. If shares are left over, those who exercised may ask for more.

Lesson complete

Next lesson

I2.1Intermediate · Lesson I2.1Allowed and forbidden: the REIT portfolioThe shelf of what the manager may buy — and what stays behind glass.Continue
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Educational content, written for learners. Not investment advice.