Ovo Energy plotting takeover of Shell Energy Retail - report
By Michele Maatouk
Date: Wednesday 29 Mar 2023
(Sharecast News) - Ovo Energy is reportedly plotting a takeover of Shell's UK domestic gas and electricity business in a move that would see it reclaim the number two slot in the British market.
According to Sky News, Ovo is expected to table an indicative offer for Shell Energy Retail Limited's (SERL) UK operation, which has 1.4m energy customers.
Sources told Sky that a bid would be tabled on Wednesday to meet an informal deadline set by Lazard, which is overseeing the process on Shell's behalf.
If successful, it would grow Ovo's customer base from about 4m UK households to 5.4m households, edging it ahead of Octopus Energy, which - following its takeover of the nationalised supplier Bulb - now has close to 5m household customers.
Industry executives said that British Gas owner Centrica had also been exploring an offer for the SERL arm.
Such a move would be controversial because it would see the industry's largest player substantially grow its market share.
Octopus Energy is said to be a less likely bidder for SERL, although an offer from it would not be inconceivable, Sky said,
Shell said in January that it was launching a review of its household energy supply business in the UK, Germany and Netherlands.
Its presence in the latter two markets is much smaller than in the UK.
Shell is also keen to offload its broadband customer book in the UK, which has about 500,000 customers, according to insiders.
Ovo Energy does not have a presence in the UK broadband market and would want to offload that part of the Shell business to a partner.
Sky said it was unclear on Wednesday whether Ovo would fund a takeover of Shell's UK arm from existing financial resources or whether it would need to raise new equity or debt.
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