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Octopus Energy is close to clinching a takeover of stricken rival Bulb in a deal that will crystallise up to £4bn of losses for British taxpayers.

Sky News has learnt that ministers at the Treasury and the Department for Business, Energy and Industrial Strategy (BEIS) have been told that a sale of Bulb’s 1.6m-strong customer base is now the optimal outcome.

Industry sources said this weekend that the government and Bulb’s special administrator, Teneo Financial Advisory, were preparing to sign a binding agreement to sell the company to Octopus Energy by the end of this month.

The transaction, which is said to have the backing of industry regulator Ofgem, would be targeted for completion in December, according to one of those insiders.

If completed, it would end nearly a year of uncertainty over the fate of Bulb, Britain’s seventh-largest residential power supplier at the point of its collapse.

The government has already been forced to spend billions of pounds buying gas to supply Bulb customers because the company did not hedge its purchases in order to fix its cost base.

Wholesale gas prices have soared over the last year, with Vladimir Putin’s invasion of Ukraine having a particularly pronounced impact on global energy markets.

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Sky News revealed during the summer that Octopus Energy, run by Greg Jackson, was seeking a £1bn taxpayer funding package to seal the takeover of Bulb.

That would allow the buyer to secure sufficient forward supplies of gas to steer the company through the winter months.

Octopus intends to repay the roughly-£1bn government funding over a period lasting a number of months, according to sources close to the situation.

An energy industry expert said on Saturday: “Under public ownership, Bulb has been unhedged and will have cost the taxpayer billions.

“Fixing its trading in an orderly way will take several months to avoid moving the market and making things even more expensive for everyone.”

Insiders said the sale to Octopus would deliver the best achievable financial outcome for taxpayers, while also giving certainty to Bulb customers.

Mr Jackson’s company is expected to pay between £100m and £200m to take on Bulb’s customer base, with a separate profit-share agreement giving the government a return for several years on earnings from Bulb customers.

Kwasi Kwarteng, the chancellor, and Jacob Rees-Mogg, business secretary, are likely to be asked to sign off the deal in the next three weeks.

Bulb’s collapse in November 2021 was the most significant among dozens of supplier failures, with Ofgem, the industry regulator, facing heavy criticism for its approach to licensing new entrants to the market.

The independent Office for Budget Responsibility said in March that the bailout of Bulb would require more than £2bn to cover its operating losses, although that figure is since understood to have soared.

Nevertheless, it is still dwarfed by the cost of subsidising household and business energy bills for the next six months, which the Centre for Economics and Business Research, a think-tank, recently estimated at in the region of £30bn.

Liz Truss’s administration is seeking long-term gas supply deals with foreign states but has been warned by Treasury officials that it faces paying a “security premium” because of elevated current prices, reports said this week.

In Bulb’s case, the profit-share agreement, which would last several years, would enable the government to recoup a small part of the cost to taxpayers.

Some sector executives have estimated that Bulb is losing as much as £5m every day because of its failure to hedge forward gas purchases.

Octopus Energy’s swoop on its competitor in would take its customer base to approximately 5m British households and cement its status as one of the most important utilities operating in the UK.

Founded by Mr Jackson, it has raised more than £1bn from a swathe of blue-chip investors.

It recently completed a $550m fundraising, with $325m committed to support the growth of its UK and international energy technology platform, Kraken.

The accountancy firm KPMG is advising Octopus Energy on the talks about a takeover of Bulb.

Octopus Energy declined to comment on Saturday, while a government spokesman said: “The Special Administrator of Bulb is required by law to keep costs as low as possible.

“We continue to engage closely with them to ensure maximum value for money for taxpayers.”

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US Federal Reserve defies calls from Donald Trump to cut interest rate

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US Federal Reserve defies calls from Donald Trump to cut interest rate

The Federal Reserve has defied calls from US President Donald Trump for a cut to the interest rate by leaving it unchanged.

The decision means it has an effective rate of 4.3%, where it has remained after the central bank, known as the Fed, reduced it three times last year.

“We’re keeping the rates high, and it’s hurting people from buying houses,” Mr Trump told reporters. “All because of the Fed.”

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Mr Trump has repeatedly been asked whether he would fire Fed chair Jerome Powell if he failed to heed his demand to cut the rate.

In June, the US president labelled Mr Powell a “stupid person” after the Fed decided not to change rates. Then less than two weeks later, in a further attack, he said the Fed’s chair should “ashamed” and would “love” him to resign.

The US president has spent months verbally attacking Mr Powell.

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Fed chair has ‘done a bad job’, says Trump

There were clear tensions between the pair last Thursday as they toured the Federal Reserve in Washington DC, which is undergoing renovations.

When taking questions, Mr Trump said: “I’d love him to lower interest rates,” then laughed and slapped Powell’s arm.

Donald Trump and Federal Reserve Chair Jerome Powell
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There were clear tensions between the US President and Mr Powell during last week’s visit to the Federal Reserve. Pic: Reuters

The US president also challenged him, in front of reporters, about an alleged overspend on the renovations and produced paperwork to prove his point. Mr Powell shook his head as Trump made the claim.

When Mr Trump was asked what he would do as a real estate mogul if this happened to one of his projects, he said he’d fire his project manager – seemingly in reference to Mr Powell.

Donald Trump challenges Federal Reserve Chair Jerome Powell about the cost of renovations
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Donald Trump challenged Mr Powell in front of reporters. Pic: Reuters

Unlike the UK, the US interest rate is a range to guide lenders rather than a single percentage.

The Fed has expressed concern about the impact of Mr Trump’s signature economic policy of implementing new tariffs, taxes on imports to the US.

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Trump’s tariffs: What you need to know

On Wednesday, the president said he was still negotiating with India on trade after announcing the US will impose a 25% tariff on goods imported from the country from Friday.

Mr Trump also signed an executive order on Wednesday implementing an additional 40% tariff on Brazil, bringing the total tariff amount to 50%, excluding certain products, including oil and precious metals.

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The committee which sets rates voted 9 to 2 to keep the benchmark rate steady, the two dissenters were appointees of President Trump who believe monetary policy is too tight.

In a policy statement to explain their decision, the Federal Reserve said that “uncertainty about the economic outlook remains elevated” but growth “moderated in the first half of the year,” possibly bolstering the case to lower rates at a future meeting.

Nathan Thooft, chief investment officer at Manulife Investment Management, described the rate decision as a “kind of a nothing burger” and it was “widely expected”.

Tony Welch, chief investment officer at SignatureFD, agreed that it was “broadly as expected”. He added: “That explains why you’re not seeing a lot of movement in the market right now because there’s nothing that’s surprising.”

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Apollo charges in for stake in £7bn petrol retailer Motor Fuel Group

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Apollo charges in for stake in £7bn petrol retailer Motor Fuel Group

The investment giant Apollo Global Management is close to snapping up a stake in Motor Fuel Group (MFG), one of Britain’s biggest petrol forecourt empires, in a deal valuing it about £7bn.

Sky News has learnt that Apollo could announce as soon as Thursday that it has agreed to buy a large minority stake in MFG from Clayton Dubilier & Rice (CD&R), its current majority-owner.

The transaction will come after several months of talks involving CD&R and a range of prospective investors in a company which is rapidly expanding its presence in the electric vehicle charging infrastructure arena.

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Banking sources said there had been a “large appetite” to invest in the next phase of MFG’s growth, with CD&R having built the company from a mid-sized industry player over the course of more than a decade.

Lazard and Royal Bank of Canada are understood to be advising on the deal.

A stake of roughly 25-30% in MFG has been expected to change hands during the process, with Apollo’s investment said to be broadly in that range.

MFG is the largest independent forecourt operator in the UK, having grown from 360 sites at the point of CD&R’s acquisition of the company.

It trades under a number of brands, including Esso and Shell.

CD&R, which also owns the supermarket chain Morrisons, united MFG’s petrol forecourt businesses with that of the grocer in a £2.5bn transaction, which completed nearly 18 months ago.

MFG now comprises roughly 1,200 sites across Britain, with earnings before interest, tax, depreciation and amortisation (EBITDA) of about £700m anticipated in this financial year.

It is now focused on its role in the energy transition, with hundreds of electric vehicle charging points installed across its network, and growing its high-margin foodservice offering.

MFG has outlined plans to invest £400m in EV charging, and is now the second-largest ultra-rapid player in the UK – which delivers 100 miles of range in ten minutes – with close to 1,000 chargers.

It aims to grow that figure to 3,000 by 2030.

CD&R, which declined to comment on Wednesday afternoon, will retain a controlling stake in MFG after any stake sale, while Morrisons also holds a 20% interest in the company.

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Bankers expect that the minority deal with Apollo will be followed a couple of years later with an initial public offering on the London stock market.

CD&R invested in MFG in 2015, making its investment a long-term one by the standards of most private equity holding periods.

The sale of a large minority stake at a £7bn enterprise valuation will crystallise a positive return for the US-based buyout firm.

CD&R and its investors have already been paid hundreds of millions of pounds in dividends from MFG, having seen its earnings grow 14-fold since the original purchase.

Morrisons’ rival, Asda, has undertaken a similar transaction with its petrol forecourts, with EG Group acquiring the Leeds-based grocer’s forecourt network.

EG Group, which along with Asda is controlled by private equity firm TDR Capital, is now being prepared for a listing in the US.

Apollo declined to comment.

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Sainsbury’s blames Visa card issues for online payment failure

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Sainsbury's blames Visa card issues for online payment failure

J Sainsbury, the supermarket chain, was on Wednesday racing to resolve an issue with card payments made involving Visa and Barclays which was impacting customers’ ability to pay for online grocery orders.

Sky News understands that Sainsbury’s is working with Visa and Barclays to address the issue after a number of shoppers reported that their card payments had failed.

A Sainsbury’s spokeswoman initially said Visa card payments were to blame for the problems, with the retailer subsequently updating its position to say the technical issue actually rested with Barclays.

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The grocer ruled out the possibility of a cyberattack and said its website and app were functioning normally, with no direct impact on customers.

The issue nevertheless illustrates the extent to which the industry is on high alert for cybersecurity-related incidents after a spate of attacks which have raised concerns about the sector’s resilience.

In recent months, major British retailers including Marks & Spencer, the Co-op and Harrods have been the victim of cyberattacks, with the impact on M&S particularly acute.

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M&S has said the attack on its systems would cost it at least £300m and forced it to suspend online orders for months.

The Co-op saw in-store availability of thousands of products disrupted for several weeks.

A Sainsbury’s spokesperson said, “We’re working with one of our payment providers to resolve a temporary issue processing some payments for our Groceries Online service.

“We continue to deliver orders for customers and our website and app are working as normal.”

Visa said: “”Visa systems are operating normally. We are working with our partners to help them investigate.”

Barclays has been contacted for comment.

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