Ovo Energy is plotting a takeover of Shell’s UK home fuel and electrical energy enterprise in a transfer that might see it reclaim the quantity two slot within the British market.
Sky News has learnt that Ovo is anticipated to desk an indicative provide for Shell Energy Retail Limited’s (SERL) UK operation, which has 1.4m vitality prospects.
Sources mentioned {that a} bid can be tabled on Wednesday to satisfy a casual deadline set by Lazard, which is overseeing the method on Shell’s behalf.
If profitable, it could develop Ovo’s buyer base from about 4m UK households to five.4m households, edging it forward of Octopus Energy, which – following its takeover of the nationalised provider Bulb – now has near 5m family prospects.
Industry executives mentioned that Centrica, the proprietor of British Gas had additionally been exploring a proposal for the SERL arm.
Such a transfer can be controversial as a result of it could see the business’s largest participant considerably develop its market share.
Centrica has additionally been embroiled in a scandal over the compelled set up of pre-payment meters through the cost-of-living disaster, sparking fury amongst politicians about each the corporate’s conduct and regulator Ofgem’s oversight of the practices.
Octopus Energy is claimed to be a much less seemingly bidder for SERL, though a proposal from it could not be inconceivable.
The business’s largest gamers have been caught up in a bitter row over the takeover of Bulb in current months, with a bunch of suppliers led by Centrica mounting a authorized problem to the sale to Octopus.
The bailout of Bulb is now anticipated to price far lower than the multibillion pound invoice initially envisaged as wholesale fuel costs have continued to fall.
Ovo was among the many rival bidders for Bulb, the collapse of which in November 2021 was probably the most important amongst dozens of provider failures.
Ofgem has confronted heavy criticism for its strategy to licensing new entrants to the market and has promised to overtake the regime.
Shell mentioned in January that it was launching a assessment of its family vitality provide enterprise within the UK, Germany and Netherlands.
Its presence within the latter two markets is way smaller than within the UK.
Shell can be eager to dump its broadband buyer ebook within the UK, which has about 500,000 prospects, in keeping with insiders.
Ovo Energy doesn’t have a presence within the UK broadband market and would wish to offload that a part of the Shell enterprise to a companion.
When Ovo’s founder, Stephen Fitzpatrick, struck a deal to remodel his firm by buying the home vitality arm of SSE in 2019, he offered its broadband buyer base to TalkTalk.
It was unclear on Wednesday whether or not Ovo would fund a takeover of Shell’s UK arm from present monetary assets or whether or not it could want to lift new fairness or debt.
An Ovo spokeswoman declined to touch upon its curiosity in buying the Shell enterprise.
Centrica and Shell additionally declined to remark.
Source: information.sky.com”