British Gas, Eon and ScottishPower have succeeded in delaying the completion of Bulb Energy’s acquisition by rival Octopus after complaining to a court about the speed and opacity of the deal.
A High Court judge has adjourned a hearing paving the way for the transfer to Octopus of Bulb, which went into “special administration” in November last year, following the intervention.
Bulb has for the past year been propped up using a £1.69bn government loan in what has been the biggest taxpayer bailout of a company since the rescues of Royal Bank of Scotland and HBOS during the 2008-09 financial crisis.
The High Court sitting in Birmingham was due on Friday to set a date for the transfer of Bulb and its 1.5mn customers to Octopus.
Richard Fisher KC, barrister representing Bulb’s special administrator Teneo, argued to the court that the process should be completed by the evening of November 15, less than three weeks after the deal was announced.
The speed of the transaction was critical to allow Octopus to hedge — or buy forward — electricity and gas for Bulb customers to match the patterns of Ofgem’s “energy price cap”, he said.
However, British Gas, Eon and ScottishPower applied for the hearing to be delayed, arguing they needed more time to examine the transaction. A delay would also allow them to potentially seek permission for a High Court judicial review of the government’s decision to approve the deal.
Jonathan Adkin KC, barrister representing British Gas, told the Birmingham court hearing there had been “a serious lack of transparency” in relation to the deal as well as a “total lack of consultation.”
The judge was told there was no urgency for the transfer date as long as it occurred by a long stop date of December 31.
Few details of the Octopus deal have been disclosed other than a confirmation that the UK government would continue to provide funding to a new entity housing the Bulb business, which would be part of the wider Octopus group, to fund the purchase of energy for Bulb’s customers.
Mr Justice Antony Zacaroli ruled on Friday afternoon that the hearing should be delayed. He said he had noted arguments that a judicial review ruling had “real potential to create chaos” in the event any sale transaction had to be potentially reversed or partly undone.
The court also heard that £1.14bn of the £1.69bn government loan used to support Bulb has been drawn down.