Octopus Energy’s takeover of Bulb was in court today as British Gas, ScottishPower and E.ON launched long-awaited judicial reviews of the deal.
Octopus bought Bulb out of government-handled administration in December, having been the lone bidder for the failed energy supplier, gaining both its 1.5mln customers and an anticipated £4.5bn worth of public support.
Some rivals, Centrica PLC (LSE:CNA) owned British Gas, Iberdrola’s ScottishPower and E.ON, argued the public funding was not advertised as part of the deal though, and that there had been a “lack of transparency” from the government’s business department.
As a result, the trio launched legal action over the deal in November, ultimately delaying the takeover which was completed a month later.
British Gas claimed Octopus had “been the beneficiary of hugely advantageous arrangements which were not offered to other participants in the sales process,” in a court filing.
"Had (firms) been told subsidies were on offer, that would fundamentally change the landscape in what they were participating in the bidding process," British Gas lawyer Paul Harris previously said.
Octopus, meanwhile, claims the government was actually the major beneficiary of the deal, according to documents seen by Bloomberg, given it is set to make a profit from the sale.
Treasury rules prevented the government from buying energy for Bulb’s customers in advance, meaning it has reaped the rewards since gas prices fell between August and December due to a profit-sharing clause in the deal.
Octopus grew to become the UK’s fourth-largest energy supplier as a result of the deal, which ultimately lifted Bulb out of administration after its failure in November, over a year before.