Saudi Arabia's No.2 mobile company Etihad Etisalat <7020.SE> (Mobily) is in talks to buy a stake in loss-making fixed-line operator Etihad Atheeb <7040.SE>, according to a statement on the kingdom's bourse.
The two firms have entered non-binding talks for a Mobily (Riyadh, Saudi Arabia) subsidiary to buy a stake in Atheeb (Riyadh, Saudi Arabia), according to the statement, which sets a June 30 deadline to announce "relevant developments".
This did not state what size stake Mobily was seeking or who the potential sellers are.
Bahrain Telecommunications Co
Mobily, a subsidiary of the United Arab Emirates' Etisalat
It signed a Memorandum of Understanding with Atheeb, which operates under the brand name Go, in December to offer fixed-line calls.
Mobily's chief executive Khalid al-Kaf told Reuters in January that this would soon become a formal partnership, with his company becoming a re-seller for Atheeb's estimated 2 million lines.
Atheeb, which a made a net loss of 274.1 million riyals in the financial year ending March 31.
The firm cut its capital to 400 million riyals from 1 billion riyals in 2011 to offset some of its accumulated losses, as per Saudi bourse rules. It then completed a 1.18 billion riyals rights issue the following year.
Mobily, Batelco and Atheeb were not immediately available for comment.
(Reporting by Matt Smith; Editing by Louise Heavens)