Buyout backers are making a huge mistake … again
The Peoria City Council might decide to seek a partner or two to to buy the suddenly for sale Illinois American Water Company.
I keep seeing paragraphs like this in the press:
On the open market, Peoria wouldn’t be constrained by the appraisers’ set price of $220 million – a strong factor that many council members noted in voting against the buyout.
First: I hope I’m wrong about this, but I don’t think that we can get the water company anything substantially less than the $220 million. If that figure was as ridiculously above the fair market value as some people believes, Illinois American’s owners would have jumped at the deal. But they didn’t.
Second: This idle speculation is setting us up for another fall. For years, buyout backers were telling voters it would cost substantially less than the price that was eventually set by the court. This lead to a massive defeat in the advisory referendum.
A buyout makes sense, even at the $220 million price. If backers start dangling a low-ball estimate in front of voters again — and it turns the free market price is much higher — it might have the same effect it did last time.
So, cool it and start doing what smart politicians do: lower expectations and work toward achieving a pleasant surprise.
UPDATE: Even the award-winning editorial board is getting in the raising expectations act:
Then again, it’s difficult to fathom why any private purchaser would pay that sum, either, since the company was deemed by appraisers to be worth considerably less to any buyer whose pockets weren’t taxpayer deep. Beyond that, how attractive can Peoria’s water assets be to any prospective buyer who is looking at fighting off a city buyout attempt every five years? City Hall is not without leverage here.
I’m hoping this is true. I’m not sure it is.
