Ovo Energy is teeing up a bid for Shell’s UK retail gas and electricity business and its 1.4mln customers according to reports today.
A bid is expected to be tabled today (Wednesday) to meet an informal deadline set by Lazard, which is handling the sale, according to Sky News.
Ovo is currently the UK’s second largest household energy supplier with around 4mln customers following its acquisition of SSE’s retail business in 2020.
Octopus Energy has around 5mln customers following its acquisition of collapsed supplier Bulb, with British Gas still the largest supplier by far.
The report suggested Centrica, which owns British Gas, is also mulling an offer for the Shell business, though this would likely spark another row over its size in the marketplace.
Legal action is already currently underway over the sale of Bulb to Octopus, with rivals such as Centrica claiming that state aid was never mentioned when they looked at buying the business.
Ovo was among the rival bidders for Bulb, which failed in November 2021, before Octopus emerged as the buyer.
Today, it was revealed the cost to the government of supplying gas to Bulb customers would be a fraction of the original estimates after it rejected advice from regulator Ofgem to hedge the cost and instead bought on the open market where prices have been tumbling.
Shell announced in January it was reviewing both its household energy supply business in the UK, Germany and the Netherlands and also its UK broadband business.
Earlier this week, Ovo became the first UK supplier to offer a fixed rate tariff below the government's household bill price cap of £2,500.
UK household and gas supply has seen a frenetic consolidation recently after 29 small suppliers, including Bulb, went bust after gas prices soared in the wake of the Ukraine war.