French-owned EDF Energy is one of a handful of parties negotiating with British So Energy's owners, Sky News reported, and faces at least one rival bidder whose identity has not been established.
If EDF prevails in the auction, industry insiders expect the transaction to cover So Energy's customer base rather than the company as a whole.
So Energy has roughly 300,000 household electricity customers and was founded back in 2015.
Ireland's Electricity Supply Board took a controlling stake in 2021 and put the business under review this summer, appointing PwC to run the sale.
ESB, the Irish parent company of So Energy, has been open about the process.
"Our parent company, ESB, has initiated a process to evaluate potential divestment options for So Energy," a spokesperson for So Energy said in July adding that this followed a strategic review and that "ESB plans to focus on its core business."
For EDF, the appeal is scale in a market where it has been losing ground.
The company is among the big six suppliers that once dominated British energy, with three million customers and five million accounts, but now trails well behind Octopus Energy and Centrica-owned British Gas. Scottish Power finds itself in a similar position.
Buying a customer book rather than a company outright is the cheaper route to that scale, adding accounts directly while avoiding the operational complexity of absorbing an entire business.
The talks also come at an uncomfortable time for British households.
Ofgem lifted the price cap by 4% to £1,723 per year for the autumn, meaning bills will climb just as the industry reshuffles itself.
Meanwhile, government policy is pulling the other way as Andy Burnham used his first week as prime minister to announce that VAT would be scrapped from domestic energy bills, part of a broader push to tackle cost of living.
No agreement has yet been reached between the parties.
