Bulb Energy Ltd

The High Court has set a date of 20 December for Octopus Energy to complete its deal to buy Bulb Energy Ltd despite opposition from certain rivals.

Bulb is an energy supply company which holds an electricity supply licence, a gas supply licence and a gas shipper licence. At present, it has approximately 1.5 million UK domestic customers.

The company entered administration on 24 November 2021, on application by the Gas and Electricity Markets Authority, after the company experienced a sharp increase in net losses and deterioration in cash flow due to increases in the price of wholesale gas and electricity. Matt Cowlishaw, Matthew Smith and Daniel Butters of Teneo were appointed Joint Energy Administrators.

After a year of trading the business, and following a period of marketing and negotiation, on 28 October 2022 the Joint Energy Administrators agreed the terms of a proposed sale transaction with Octopus.

On 8 November 2022, the Joint Energy Administrators applied to appoint an effective time for the purposes of an energy transfer scheme to effect the transaction. The scheme is designed to ensure that all existing energy supply customers continue to receive energy supplies in accordance with their existing agreements, albeit from a new supplier, and that all credit balances are transferred.

The application, which was heard on 29 and 30 November, was opposed by: (1) ScottishPower Energy Retail Limited and SP Smart Meter Assets Limited (together “SPR“); (2) British Gas Trading Limited (“BGT“); and (3) E.ON UK plc (“E.ON“).

The opposing parties argued that the marketing process undertaken by the Joint Energy Administrators was flawed, that information as to government funding available to purchasers was not made available to other bidders other than Octopus, and that regulatory interventions in the energy market since the marketing process was undertaken mean that better terms could now be reached than those agreed with Octopus.

The objecting parties have also recently commenced judicial review proceedings, challenging the lawfulness of, among other things, the Secretary of State’s decision to approve the scheme.

Mr Justice Zacaroli of the High Court ultimately set a date of 20 December for the proposed takeover to be completed, ruling that, in substance, BGT, SPR and E.ON were asking for interim relief in the context of their application challenging the lawfulness of the Secretary of State’s decision. This relief is properly sought from the Administrative Court hearing the judicial review application, and could include suspending the effect of the Secretary of State’s decision pending resolution of the challenge to it.

Mr Justice Zacaroli stressed that he was not rejecting the arguments of BGT, E.ON and SPR that interim relief by way of suspending the effective time until after conclusion of the Judicial Review proceedings was appropriate, but rather considered this to be an issue which must be resolved by application for interim relief in the Administrative Court.

Mr Richard Fisher KC, Mr Tom Hickman KC, Mr Henry Phillips and Mr Edoardo Lupi (instructed by Linklaters LLP) represented the Joint Energy Administrators at the hearing.

The High Court’s decision can be found HERE, and the Administrators’ latest Progress Report can be found HERE.