Could someone enlighten what this means? "If you do not wish to...

Could someone enlighten what this means?

"If you do not wish to accept all or part of your Entitlement, you are not obliged to do anything. If Eligible Shareholders do not take up their entitlement, their existing interest in the Company will be diluted. Please refer to sections 2.4 and 3.2 of this Prospectus."

"Shareholders should note that if they do not participate in the Offer, their holdings may be diluted by up to approximately 25% (as compared to their holdings and number of Shares on issue as at the date of the Prospectus and assuming that no existing or new Options are exercised immediately following completion of the Offer). The dilution impact of the Offer to Shareholders that do not participate in the Offer will reduce to the extent that Shortfall Shares that are not underwritten are not issued."

Does it mean that existing shares get diluted by 25% if I don't participate??