Octopus Energy is reportedly closing in on a takeover of its rival Bulb in a deal that will set the final bill to the taxpayer at an estimated £4bn.
Ministers at the Treasury and the Department for Business, Energy and Industrial Strategy (BEIS) have been informed that a sale of Bulb’s customer base of 1.6 million would be the most favourable outcome, according to Sky News.
Octopus Energy is said to be hoping to agree on a deal for Bulb, which has been under public ownership for almost a year after its collapse in November, by the end of the month.
Industry sources reportedly said the government and Teneo Financial Advisory, Bulb’s special administrator, were getting ready to sign an agreement to sell the company to Octopus by the end of October.
The transaction, which Sky reports has the backing of Ofgem, the industry regulator, would aim to be completed in December, an insider told the broadcaster.
Octopus Energy, which is run by Greg Jackson, has been reported to be pursuing a £1bn taxpayer package to secure a Bulb takeover. If the deal is completed, it would bring to an end months of uncertainty surrounding Bulb, which is the UK’s seventh-biggest residential power supplier.
The government has had to spend billions of pounds on gas to supply Bulb customers amid soaring wholesale gas prices and Russia’s invasion of Ukraine.
Octopus and Ofgem both declined to comment, while Bulb did not immediately respond to the Guardian’s request for comment.
A government spokesperson said: “The special administrator of Bulb is required by law to keep costs as low as possible. We continue to engage closely with them to ensure maximum value for money for taxpayers.”
Last week, Bulb’s co-founder, Amit Gudka, told the Guardian that he is planning to expand Field Energy, his loss-making battery storage company, into Europe.
Gudka, who left Bulb in February 2021, said the company had hired its first employee in Italy, where it has started looking for sites. “We’re identifying sites,” he said. “The expectation is that there’s going to be demand in the north – and a lot of renewables are being built in the south – so a good place for storage in quite a long grid will be the centre of the country.”
• This article was amended on 8 and 9 October 2022 to correct a sentence and caption in which Bulb was mistakenly referred to as Octopus Energy.
