British Gas, Scottish Power challenge Bulb takeover

The three rival firms have filed judicial review applications at London's High Court, challenging the decision to approve the takeover and provide funding to allow the deal for Octopus to buy Bulb.

The value of the Octopus Energy deal has not been published but the BBC understands that the firm paid the government between 100 m and 200 m. The deal needs to be approved by the High Court.

Stephen Robins KC, for Scottish Power, said in written submissions that the marketing of the Bulb sale was defective and should be re-run to allow for alternative bids.

He said that Octopus had received a cash gift or dowry from the government in relation to the transaction, full details of which rivals had not seen.

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

Richard Fisher KC, representing Bulb's administrators from the Teneo consultancy firm, rejected Scottish Power's highly controversial version of events and said in written submissions that other energy companies had decided to walk away from the sale process.

A spokeswoman for the Department for Business, Energy and Industrial Strategy BEIS said the company would continue to work hard to get this resolved as soon as possible, and said it could not comment on the legal proceedings.

The bailout of Bulb was the biggest of the state since the collapse of the Royal Bank of Scotland in 2008, and was the biggest one by the state. The Office for Budget Responsibility OBR, the official budget forecaster, said the support for the firm will cost around 6.5 billion dollars for taxpayers.