Bulb takeover by Octopus set for Judicial Review - report

The UK’s sale of Bulb Energy to Octopus Energy is facing further delays as rivals plan to challenge the government’s decision in court, according to a report.

According to Bloomberg, Teneo’s lawyers said at a hearing in London that Iberdrola’s Scottish Power, EON SE, and Centrica’s British Gas are planning to take the deal to Judicial Review, a court process that looks at the legality of a government decision.

A judge was expected to approve the acquisition this week but that has been stymied by the other suppliers who want further scrutiny of a decision they fear was rushed.

Bulb collapsed last year when wholesale prices spiked above the regulator’s price cap, forcing it to sell energy at a loss. The government stepped in to support the biggest bailout since the financial crisis.

According to Bloomberg, Richard Fisher, a lawyer representing Teneo - which is overseeing the sale - said in court documents: "It is worth observing at the outset that the intervening energy companies each had an opportunity to participate in the sales process.

"All could have sought meetings with the administrators or government had they wished to investigate different funding options."

The cost of Bulb’s collapse is expected to balloon to £6.5bn, according to the UK’s Office for Budget Responsibility.

Scottish Power objects to the deal struck as it may involve a "dowry" being paid to Octopus of at least £1bn to cover buying energy to supply customers with, its lawyers said in court documents. The firm said details of the agreement haven’t been made public or been shown to the opposing firms.

EON confirmed the application for judicial review over the decision taken to approve the deal and "to provide substantial government funding to allow that to take place," a spokesperson told Bloomberg.