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Octopus Energy's Bulb takeover faces legal challenge from rivals

Britain's PM Boris Johnson visits Octopus Energy, in London

By Sam Tobin

(Reuters) - Collapsed British energy supplier Bulb’s acquisition by Octopus Energy faces further delays after rival suppliers E.ON, British Gas and Scottish Power told London’s High Court on Tuesday that they are mounting a legal challenge to the deal.

Bulb, which had around 1.5 million domestic customers, was one of the largest energy suppliers to collapse last year. The British government’s official budget forecaster said earlier this month that support for Bulb will cost around 6.5 billion pounds ($7.8 billion).

A deal for Octopus to buy Bulb was approved by the Department for Business, Energy & Industrial Strategy (BEIS) last month. The transaction also needed High Court approval.

But Octopus’ proposed takeover was delayed after E.ON, British Gas and Scottish Power raised concerns at a High Court hearing earlier this month.

All three suppliers have now filed a judicial review against the government’s decision to approve the takeover and to provide funding to allow the deal to take place, the court heard on Tuesday.

Jonathan Adkin, representing British Gas, said in the court hearing there had been an “abject lack of transparency” about the commercial terms of the deal.

Lawyers representing Bulb’s administrators urged Judge Anthony Zacaroli on Tuesday to set a date for the deal to go ahead, despite the pending legal challenges.

The judge said he would give a decision on Wednesday whether to set a date for the deal to go ahead.

An E.ON spokesperson confirmed it has issued legal proceedings over the government’s decision “to approve the proposed takeover of Bulb energy and its customers by Octopus and the decision to provide substantial government funding to allow that to take place”.

A spokesperson for British Gas owner Centrica confirmed that it was taking legal action.

An Octopus spokesperson said the company “will continue to work hard to get this resolved as fast as possible”.

Scottish Power did not immediately respond to a request for comment.

A BEIS spokesperson said: “We are aware that a judicial review has been issued. We cannot comment on ongoing legal proceedings.”

(Reporting by Sam Tobin. Editing by Jane Merriman)