Ovo set to bid for stricken supplier Bulb as small energy firms are wiped out by spiralling gas prices
Ovo Energy is preparing to table a takeover bid for its struggling rival Bulb.
Ovo, backed by its biggest shareholder Mitsubishi, is set to make an offer later this week for the stricken group, according to reports.
Bulb, founded in 2015 by entrepreneurs Hayden Wood and Amit Gudka, is the latest group to be pushed to the brink by the crisis rocking Britain’s energy suppliers, which has been triggered by spiralling gas prices.
Bulb is the latest group to be pushed to the brink by the crisis rocking Britain’s energy suppliers, which has been triggered by spiralling gas prices
This is making it difficult for many firms to stay afloat and fears are mounting that customers will see their monthly bills surge as a result.
Over the weekend it was reported that Bulb was forcing them to pay higher bills – by as much as 80 per cent – even when many are in credit.
The energy price cap – which puts a limit on the standard variable tariff rate – rose by £139 to £1,277 last Friday.
E.on picks up pieces
MORE than 230,000 households have been moved to E.on Next after the energy supplier picked up the pieces from three failed rivals in the sector.
Regulator Ofgem said it had appointed E.on Next to take on customers who were once on the books of Enstroga, Igloo Energy and Symbio Energy.
They will all be switched over by E.on, and can continue to use their gas and electricity as before. Ofgem director of retail Neil Lawrence said customers ‘do not need to worry’ as supply will not be interrupted.
But many are bracing for it to rise even more sharply the next time it is calculated in the spring. Nine energy suppliers buckled under the weight of the gas crisis and went bust in September, including People’s Energy, Avro Energy, Enstroga and Utility Point. Experts believe dozens more could collapse the end of this year.
Industry regulator Ofgem has reportedly been on alert and checking in with suppliers every week, asking serious questions about their ability to survive.
The smaller ‘challenger’ firms have struggled because they do not tend to have enough cash to buy their power in advance – a process known as hedging – leaving them at the mercy of the market.
Bulb’s adviser Lazard has set a deadline for tomorrow to receive bids for the stricken company, Sky News reported.
A tie-up between Ovo and Bulb would create Britain’s second-largest energy supplier behind British Gas.