Judges to rule on High Court challenge over sale of energy company Bulb
Scottish Power, British Gas and Eon have claimed that the sale of the collapsed company to Octopus was unfair.
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Judges are set to give their ruling on a High Court challenge over the Government’s handling of the sale of collapsed energy firm Bulb.
Scottish Power, British Gas and Eon claimed that an “unfair sale process” led to decisions “to commit billions of pounds of taxpayer money to facilitate the acquisition of a failed business” by rival firm Octopus Energy.
The three major suppliers brought legal action against the Government, alleging its decision-making process in relation to the transaction was “flawed and unlawful”.
Lord Justice Singh and Mr Justice Foxton are expected to issue their written judgment on the case at 10am on Friday.
At a hearing in London last month, the judges were told that the handling of the sale allegedly prevented British Gas making a “better” offer that could have saved money for taxpayers.
British Gas’s legal team also claimed that “the process by which the subsidy was granted was seriously lacking in transparency, openness, fairness and equal treatment”.
The energy companies challenged two decisions taken by the then Department for Business, Energy and Industrial Strategy (BEIS) in October and November – to approve the takeover and to provide “very substantial central Government funding” to help with the transfer.
The department’s lawyers said the claims against it were “without merit”, arguing that companies were aware they could seek Government support.
They said it made “rational” decisions following expert advice that Octopus’s offer represented “the value that the market is placing on Bulb in the current sector environment”.
Unwinding the sale now would be “liable to cause chaos”, the Government’s lawyers warned.
Octopus argued its rivals’ complaints were a “rewriting of history” and that its purchase of Bulb would be “extremely beneficial” for the Government and taxpayers.
In October, Octopus announced a deal to buy its rival and take on Bulb’s approximately 1.6 million customers after the 650-employee firm was placed into special administration in November 2021.
It was later revealed in December that ministers were prepared to pay up to £4.5 billion to help fund the takeover of Bulb, but Octopus has claimed the Government stands to make a £1.19 billion profit from the transaction.