Octopus Energy is closing in on a takeover of rival Bulb in a deal that will set the final bill to the taxpayer at around £4bn.
Finance ministers and the Department for Business, Energy and Industrial Strategy (BEIS) have been told that a sale of Bulb’s 1.6 million customer base would be the most favorable outcome, according to Sky News.
Octopus Energy is said to be hoping to reach a deal for Bulb, which has been publicly owned for almost a year after its collapse in November, by the end of the month.
Industry sources said the government and Teneo Financial Advisory, Bulb’s special administrator, were preparing to sign a deal 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 complete in December, a source told the broadcaster.
Greg Jackson-led Octopus Energy is reportedly chasing a £1bn taxpayer package to secure a takeover of Bulb. If the deal goes through, it would end months of uncertainty surrounding Bulb, which is the UK’s seventh largest residential energy supplier.
The government has had to spend billions of pounds on gas to supply Bulb customers amid rising wholesale gas prices and the Russian invasion of Ukraine.
Octopus and Ofgem declined to comment, while Bulb did not immediately respond to the Guardian’s request for comment.
A government spokesman said: “Bulb’s special administrator is required by law to keep costs as low as possible. We continue to work closely with them to ensure maximum value for taxpayers.”
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Last week, Bulb co-founder Amit Gudka told the Guardian that he plans 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 begun looking for positions. “We are identifying sites,” he said. “The expectation is that there will be demand in the north and a lot of renewable energy is being built in the south, so a good place for storage in a fairly long grid will be the center of the country.”