Judges to rule on High Court challenge to sale of energy company Bulb

The judges are going to rule on a High court challenge over the government’s handling of the sale of the collapsed energy company Onion.

Scottish Power, British Gas and Eon said an “unfair sales process” led to the decisions “to commit billions of pounds of taxpayers’ money to facilitate the acquisition of failing businesses” by rival firm Octopus Energy.

Three major suppliers filed a lawsuit against Govtarguing that the decision-making process for the deal was “flawed and illegal”.

Lord Justice Singh and Judge Foxton are expected to deliver their written decision in the case at 10am on Friday.

At the hearing in London Judges were told last month that the handling of the sale allegedly prevented British Gas from making a “better” offer that could have saved taxpayers money.

British Gas’ legal team also argued that “the process in which the subsidy was granted seriously lacked transparency, openness, fairness and equal treatment”.

Energy companies challenged two decisions taken by the then Department for Business, Energy and Industrial Strategy (BEIS) in October and November to approve the takeover and to provide “very significant central government funding” to help with the transfer.

Lawyers for the department said the claims against it were “baseless”, arguing the companies knew they could seek government support.

They said they took the “rational” decisions following expert advice that the Octopus offer represented “the value the market places on Bulb in the current sector environment”.

Government lawyers have warned that stopping the sale now could “cause chaos”.

Octopus argued that rival complaints were “rewriting history” and that buying Bulb would be “extremely beneficial” for the government and taxpayers.

In October, Octopus announced a deal to buy its rival and take on Bulb’s roughly 1.6 million customers after the 650-employee firm was placed into special administration in November 2021.

It emerged later in December that ministers were prepared to pay up to £4.5bn to help fund a takeover of Bulb, but Octopus claimed the government would make a profit of £1.19bn on the deal.