Date Set For Octopus To Buy Failed Energy Firm Bulb

A date has been set for Octopus Energy to complete its deal to buy failed supplier Bulb despite legal challenges from rival suppliers.

Bulb, which has about 1.6 million customers, is currently being run by the energy regulator Ofgem after being bailed out by the taxpayer.

On Wednesday, a High Court judge set a date of 20 December for the proposed takeover to be completed.

But Mr Justice Zacaroli said legal challenges could still stop it.

Rival suppliers Eon, British Gas and Scottish Power have applied for a judicial review of the deal, arguing the government's sale of Bulb was not transparent and involved unfair government funding for Octopus.

A judicial review is a type of court case that allows the legality of a government decision to be challenged.

Mr Zacaroli said the applications from the rivals were now the "only obstacle" to Bulb's assets being transferred over to Octopus.

He ruled that the legal challenges should be heard by another court.

The wrangling will not affect Bulb customers, who will remain under Ofgem's service until any deal for a buyer is finalised.

Bulb was the biggest of more than 30 energy companies that collapsed last year following a spike in wholesale gas prices.

The business department (BEIS) approved a deal with Octopus to buy Bulb in October and it was expected to be completed by the end of November.

But the acquisition was delayed after Eon, British Gas and Scottish Power raised concerns earlier this month.

Octopus Energy said after Wednesday's ruling that the High Court had "rightly given the green light for the transfer to go ahead in December".

"Taxpayers will be saved from millions - even billions - of costs that could have been incurred if the process was dragged out," a spokesperson said.

"This is positive news for Bulb's customers and staff, and starts to bring to an end the huge financial exposures for government and taxpayers."

However, in written submissions to the court on Tuesday, Stephen Robins, King's Counsel (KC) for Scottish Power, said that the marketing of the Bulb sale was "defective" and the auction should be re-run to allow for alternative bids.

Meanwhile, Jonathan Adkin, representing British Gas, told the court there had been an "abject lack of transparency" about the commercial terms of the deal.

Bulb's administrators rejected the arguments and said that other energy companies had decided to "walk away" from the sale process.

On Wednesday, Mr Justice Zacaroli set the date of 20 December as a start date under an Energy Transfer Scheme (ETS), which will move Bulb's relevant assets into a new separate entity.

He told the court that Business Secretary Grant Shapps's decision to sell Bulb to Octopus was a "valid and effective decision until such time a court order is made quashing it".

However, Mr Justice Zacaroli said he did not have "either visibility or control over the timing of judicial review proceedings" which could still derail the deal.

The value of the Octopus Energy deal has not been published but the BBC understands the firm paid the government between £100m and £200m.

Bulb's bailout was the biggest one by the state since the Royal Bank of Scotland collapse during the 2008 financial crisis. The government's official budget forecaster, the Office for Budget Responsibility (OBR), has said the support for the firm will cost around £6.5bn to taxpayers.