By Nicholas Earl
Octopus Energy’s takeover of Bulb Energy faces further delays and will not be approved today, after rival suppliers tabled demands for a judicial review.
The judge overlooking the case is expected to make a decision over whether to go ahead with a judicial review tomorrow.
Big Six energy firms including British Gas owner Centrica, EON and Scottish Power lodged their calls for a judicial review today – a court process that looks at the legality of a Government decision.
The suppliers are concerned about the perceived lack of transparency in the deal and the use of public funds as part of Bulb’s buyout.
This follows a three-week delay to Bulb’s approval process, after the rival firms successfully argued they needed more time to assess potential issues with the deal.
Octopus had been hoping the courts would green-light its deal for Bulb today, but there is now the possibility the exhausting corporate saga could drag on for weeks and months.
Bulb has already spent over a year in de-facto nationalisation, as the most high-profile victim of the energy crisis, collapsing amid soaring wholesale costs and exposed by its insufficient hedging strategy.
The UK’s seventh biggest supplier, home to 1.6m customers, has been propped up with taxpayer funds since its fall from grace last November.
Bulb uncertainty risks driving up prices
The costs involved in Bulb’s inglorious stint in special administration have risen to £6.5bn, the biggest state bailout since RBS in 2008, according to the latest figures from the Office for Budget Responsibility.
Further delays will increase uncertainty over its future and could see costs for overseeing Bulb climb to eye-watering heights this winter.
An E.ON spokesperson said: “We can confirm we have issued judicial review proceedings in order to challenge the decision by the Secretary of State to approve the proposed takeover of Bulb energy and its customers by Octopus and the decision to provide substantial government funding to allow that to take place.
City A.M. understands Centrica is not opposed in principle to the sale of Bulb to Octopus, but is concerned over the lack of available details regarding its buyout.
Scottish Power declined to comment.
The terms of the deal are yet to be published – butCity A.M. understands Octopus has agreed to pay the Government between £100-200m to take over Bulb.
The arrangement will also include a profit-share arrangement, ringfencing of Bulb customers and as much as £1bn in hedging support.
Octopus has been approached for comment following the latest developments.
Following the previous delays an Octopus spokesperson warned “continued uncertainty isn’t good news for Bulb staff or customers”
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