Ovo Energy, a Bristol, England based energy supply company, will present a takeover proposal for its competitor, Bulb Energy Ltd., this week in an attempt to establish the second-largest energy provider in the UK's crisis-hit energy sector.
According to reliable reports, Ovo, which reached the ranks of the industry's top players over two years ago when it closed the acquisition of SSE's retail customer base, is putting together a bid for Bulb with the support of Mitsubishi, its largest shareholder.
According to industry experts, Bulb's advisors at Lazard have set a bidding deadline of Wednesday (6 Oct) as it seeks fresh sources of finance.
A merger would combine Bulb's 1.7 million consumers with Ovo's 4.5 million, birthing an energy player that would be second only to Centrica's British Gas.
Last week it was reported that Ovo was "circling" Bulb, but individuals close to the matter claimed earlier this week that Ovo had planned to submit a formal, albeit non-binding, bid ahead of the deadline.
Octopus Energy, a British renewable energy group, has also been considering a proposal for Bulb, however, it was unclear earlier this week if it planned to make a formal offer.
The energy market crisis in the United Kingdom has resulted in the collapse of over half-dozen firms in recent weeks, with Octopus acquiring the customer base of the biggest player, Avro Energy.
Last week, it was disclosed that Ofgem, the energy market regulator, had stacked up restructuring specialists from Teneo to function as special administrator to a big supplier if the issue could not be handled through its Supplier of Last Resort (SOLR) mechanism.
According to an Ofgem spokesperson, the government and Ofgem plan for a broad range of eventualities and have long-standing contingency measures in place for any circumstance that may arise.
The size of Bulb's customer obligations and future payments under government clean energy programs remain obstacles to an acquisition by Ovo or Octopus.