Aqua President: Market spoke on price of MABS system
SHENANDOAH – Regarding the discrepancy between the two appraisals of the Municipal Authority and the agreed purchase price, Aqua’s president said the market spoke and determined what the system was worth through competitive bidding.
Aqua President Marc Lucca spoke one-on-one with the Sentinel last week in an in-depth interview about the proposed sale, and you can read more from that interview here.
His company agreed to purchase the Municipal Authority of the Borough of Shenandoah for $12.5 Million in 2020, a sale that, while approved 6-1 by borough council, has seen several residents voice opposition.
Lucca said his company came in and evaluated the system before making their bid. Pennsylvania American Water also submitted a bid around $10 Million.
“The market spoke and said the system is worth around $10-12 Million,” Lucca said.
The much higher appraisal, nearly double the purchase price, were well higher than the company expected, and the risk was Aqua’s.
“Had it gone the other way, had the purchase price been $12 Million and the fair market value been, say, $8 Million, MABS would’ve still gotten $12 Million,” Lucca said. “I think [the public] can feel comfortable knowing that the market said it was between $10-12 Million and they will get all of that at close.”
One appraisal, requested by Aqua, valued MABS at $25 Million, while another, requested by the borough, placed it at $18 Million
“It’s worth what they’ll pay you for it, and if the two bidders came in at about the same price, then that’s what it’s worth,” Lucca said. “That’s one way to look at it.”
He added that the condition of the assets is reflected in the price, as well.
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