Sky News has learned that Ovo, which joined the ranks of the biggest players in the market by finalizing the takeover of SSE’s retail customers almost two years ago, is preparing a bid for Bulb with the backing of Mitsubishi, its largest shareholder.
According to industry executives, Bulb advisers at Lazard have set the deadline for the bids on Wednesday as they seek new sources of funding.
A deal would add Bulb’s 1.7 million customers to Ovo’s 4.5 million households, creating the second-largest player behind Centrica’s British Gas.
Ovo was reported on Sunday by The Telegraph as being “surrounding” Bulb, but people familiar with the situation said on Monday that he intended to submit a firm, albeit non-binding, offer before the deadline.
Octopus Energy has also explored an offer for Bulb, although it was not clear on Monday whether it plans to file a formal offer.
The UK crisis energy The market has caused more than half a dozen companies to disappear in recent weeks, with the largest customer base – Avro Energy – being taken over by Octopus.
Sky News revealed last week that Ofgem, the industry regulator, had hired restructuring experts from Teneo to act as the special administrator of a large supplier if the issue could not be resolved through the Industry supplier of last resort (SOLR) system.
A spokesperson for the regulator said: “Ofgem and the government are preparing for a wide range of scenarios and have long-standing contingency plans in place for any situation as needed. These processes include speaking to a range of organizations. “
Obstacles to the takeover of Bulb by Ovo or Octopus remain, in particular the extent of commitments to Bulb’s customers and its future payments under government renewable energy programs.
Nonetheless, a takeover would represent a coup for Ovo founder Stephen Fitzpatrick, who has grown the company from scratch since its inception in 2009.
His HSE integration would be well ahead internally, leaving him well positioned to consider a Bulb-wide acquisition.
Some suppliers have pleaded with the government to remove the price cap from the industry, an idea which was rejected by Business Secretary Kwasi Kwarteng.
The energy price cap, which rose to £ 1,309 for prepaid customers at the start of this month, is now expected to be significantly increased again when it is next revised in spring 2022.
A Bulb spokesperson said: “From time to time we explore various opportunities to fund our business plans and continue our mission of reducing bills and CO2 emissions. Like everyone else in the industry, we monitor wholesale prices and their impact on our business. “
Bulb, which like Octopus Energy is loss-making, was established in 2015 and has grown rapidly by offering offers at competitive prices.
E.ON Next, the new brand that unites E.ON and npower customers, has around 5.2 million residential customers, while British Gas remains the market leader with around 7 million customers.
EDF Energy, the French public supplier, and Scottish Power are the remaining members of the former “Big Six”.
Ovo declined to comment.