Ditto possible tilts for GSK’s consumer arm, even larger at a mooted price tag of around £45bn, which means opportunistic moves for blue-chip beasts such as SSE, Vodafone, and Reckitt Benckiser can’t be ruled out either.
There are worrying echoes of the last real buyout boom leading up to the financial crash when financiers, sensing that the music was about to stop, rushed to get money out of the door at increasingly silly valuations that quickly came back to haunt them.
With interest rates set to climb around the world, perhaps this is the final hurrah of the latest frenzy, another era of cheap credit destined to end badly for many.
Ad tycoon Sir Martin Sorrell likens it to a “false economy” with everybody living in “a fool’s paradise”. To paraphrase Warren Buffett, when the tide goes out, we get to see who’s been swimming naked.
We already know Bulb has lost its trunks. The collapse of the energy supplier will come as a shock to its 1.7m customers who may have wrongly thought it had become too big to fail. But it won’t be a surprise to anyone that has followed the company’s rapid rise closely.
The east London start-up professed to be more than just your average, run-of-the-mill gas and electricity supplier. It sold “green energy” and came with hi-tech credentials that would enable it to challenge the sleepy established order.
It was a heady mix. Households, fed up of being ripped off by the Big Six, rushed to sign up, and so too did investors, wowed by claims of proprietary technology that could reduce bills and help save the planet too.
You can’t blame customers for swallowing the hype but its backers must be kicking themselves for not being more questioning.
Bulb has raised more than £60m from investors including DST Global, the high profile fund run by Russian-Israeli billionaire Yuri Milner, and Jam Jar Investments, the venture capital house of the entrepreneurs behind Innocent smoothies.
Even the venerable Financial Times was taken in, naming it top of a list of Europe’s 1,000 fastest-growing companies as recently as March.
But its cheerleaders missed one vital flaw: the Bulb model was built on the company having to reach a certain scale before wholesale energy prices turned against them, crushing its slim margins.
Creating a shiny app and a more modern IT system doesn’t enable any company, however brilliant its idea or well-meaning its intentions, to defy the basic laws of economics. It’s a painful lesson that a generation of tech hopefuls may be taught in the coming months as the economic cycle turns.