Yahoo Finance Octopus Energy calls rivals ‘desperate’ in bitter court clash
Octopus has labelled its rivals “desperate” while British Gas has claimed the energy supplier benefited from “hugely advantageous” terms in landing a deal for Bulb, during a courtroom clash.
In a court hearing in London on Friday, the energy firms traded blows in the fallout from Octopus’ deal to buy Bulb from a government-handled administration last October.
British Gas, the UK’s biggest home energy supplier, claimed Octopus received offers of government support to take on the company that were not proffered to rival bidders.
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British Gas, E.ON and Scottish Power have demanded scrutiny of the process that resulted in Octopus acquiring Bulb, which has more than 1.5 million customers.
The trio argue there has not been enough transparency over the process or the terms of the deal between Octopus and the Department for Business, Energy and Industrial Strategy (Beis).
A judicial review to examine the process will take place over three days next month, starting on 27 February.
On Friday, a judge allowed Octopus more time to make evidence disclosures at a hearing examining the evidence to be submitted for the judicial review.
Ahead of those hearings, lawyers have been poring over evidence to discern what was discussed in the run-up to Octopus clinching the deal.
A string of suppliers were initially interested in acquiring Bulb but it is understood just Octopus, British Gas owner Centrica and Masdar remained for much of the process, while Ovo revived its interest in the latter stages.
MPs have called for greater transparency over the process and rivals have claimed that Octopus has effectively received a “cash gift” or “dowry” in relation to the Bulb transaction and dubbed it “a mess-up worth billions” for taxpayers.
The Octopus chief executive, Greg Jackson, has insisted that it was a “fair deal for taxpayers” and a four-year profit-share agreement is in place with the government.
In documents filed to the court, British Gas Trading (BGT) argued that its analysis of evidence submitted during the discovery process suggests Octopus had discussed the government providing support for the deal before the company originally stated.
In its submission, BGT said: “This issue is of central importance in circumstances where Octopus has been the beneficiary of hugely advantageous arrangements which were not offered to other participants in the sale process, in particular BGT.”
BGT accused Octopus of failing to “comply with its duty of candour in respect of a critical part of the sale process” during court hearings.
A judge approved Octopus’s takeover of Bulb before Christmas but the deal could still be derailed by the judicial review.
An Octopus spokesperson said: “This court case looked vexatious to begin with, but now it’s clear that the government is likely to make a profit on the sale of Bulb to Octopus, this legal action looks even more desperate and the judge has rejected their fishing expedition in its entirety.
“Maybe if they focused on looking after customers instead of expensive court cases, they wouldn’t have won a wooden spoon for the worst service of any company in any sector, while Octopus is Which? recommended for the sixth year in a row.”
ScottishPower, E.ON and British Gas were among the worst-rated energy firms by customers in consumer group Which?’s annual survey last week, with Octopus coming out on top.
Estimates over the cost to the taxpayer of bailing out Bulb have varied wildly – largely due to the seesawing cost of wholesale gas. In December, Beis said the cost could be up to £4.5bn to fund Bulb’s operations under Octopus ownership until the end of March, depending on the movement of energy prices. Gas prices have tumbled during January.
Bulb was founded in 2015 by the entrepreneurs Amit Gudka and Hayden Wood with the intention of challenging the remaining dominance of the energy industry’s legacy supply companies, but was caught out by a sharp rise in wholesale energy prices last year.
