Energy suppliers lose High Court challenge over sale of collapsed provider Bulb

The Royal Courts of Justice in London, as judges are set to give their ruling on a High Court challenge over the Government's handling of the sale of collapsed energy firm Bulb.

Three major energy suppliers have lost their High Court challenge over the Government’s handling of the sale of collapsed energy firm Bulb.

Scottish Power, British Gas and Eon claimed an “unfair sale process” led to decisions “to commit billions of pounds of taxpayer money to facilitate the acquisition of a failed business” by rival firm Octopus Energy.

The three businesses brought legal action against the Government, alleging its decision-making process was “flawed and unlawful”.

But in a ruling on Friday, Lord Justice Singh and Mr Justice Foxton rejected the legal challenge.

The judges concluded: “In circumstances in which the Octopus transaction was the only bid to emerge from a lengthy M&A process which the Secretary of State was entitled to conclude was open, transparent and competitive, that was an assessment lawfully open to the Secretary of State.”

They added: “It was open to the Secretary of State on the material before him to conclude that the other options were inferior to proceeding with the Octopus bid, involving significant execution risks and higher forecast costs.”

British Gas owner Centrica said the ruling was “disappointing” and that it would now “consider our options.

A spokesperson said: “We think state bailouts for energy companies puts a burden on the UK taxpayer and is avoidable.

“We felt the original bailout of Bulb was unnecessary and the National Audit Office report this week concluded there were risks and uncertainties in recovering these funds from Octopus.”

They added: “The decision to bring this case was made after failed attempts to obtain transparency on the terms of the transaction and the level of state bail out being offered to Octopus/Bulb.

“We believe that the way the deal was structured creates serious risk for taxpayers and energy consumers and will distort the energy market.”