The gas and electricity supplier Ovo has revived its interest in snapping up nationalised rival Bulb, potentially gazumping a bid by Octopus Energy.
Ovo has written to Bulb’s special administrator to inform it that it is again considering a purchase. Ovo originally submitted an offer to buy Bulb shortly after it collapsed in November last year, but later pulled out of the auction, during which several bidders have fallen away.
Discussions between government officials and Octopus have dragged on for months. Industry sources told Sky News, which first reported Ovo’s renewed interest, that its proposals would not require additional taxpayer funding, unlike those of Octopus.
The government’s decision to bail out Bulb, by far the largest supplier to collapse since the start of the energy crisis, is expected to be costly. It has been estimated that households could end up paying more than £150 extra on their energy bills because of the collapse of Bulb, as the price of bailing out the failed supplier threatens to top £4bn by next spring.
The cost of bailing out the UK company has escalated because of rising wholesale gas prices and a government block on allowing the company to hedge its power costs. A combined Ovo and Bulb entity would have about 5.5 million household customers and could face scrutiny from competition regulators.
Industry watchers have questioned whether Bulb, which has 1.6 million customers, could be sold whole or could be broken up.
Ovo had been expecting the sale to Octopus to fall through, followed by a piecemeal sale of its customer base. However, it has renewed its interest in the whole of the business.
Octopus was left the only remaining bidder after the British Gas owner Centrica and the Middle East energy giant Masdar pulled out of the running to buy Bulb earlier this year.
Bulb was the highest profile casualty of the energy crisis, in which more than 30 suppliers have collapsed. Many were caught out by a sharp rise in wholesale gas prices last year; Russia’s invasion of Ukraine in February has exacerbated the situation.
The Guardian reported this month that Bulb co-founder Amit Gudka’s fledgling UK battery storage venture is already considering expansion into Europe.
Ovo declined to comment.
